Course description

Corporate Finance

Introduction

The aim of this course is to provide the students with essential basic knowledge and skills with respect to corporate financial decisions. It provides an understanding of the fundamental financial problems faced by corporations and teaches how to carry out simple corporate financial analyses, make decisions and communicate the results of the analyses in a comprehensible manner.

The course Corporate Finance is mainly focused on financing issues, that is, when and in what way should companies raise capital for their investment and operational activities. By studying the main activities carried out in a company as financing projects over multiple periods, emphasis is placed on evaluating all economic effects of a project with a long-term perspective and consequently being able to optimally make both investment and strategic decisions. With this goal in mind the course not only reviews the classical economic theories of frictionless markets and the optimal corporate decisions therein but also incorporates and analyses market frictions and how the optimal decisions are modified accordingly.

Course content

  • Cost of capital
  • Financing
  • Capital structure decisions
  • Market imperfection and agency problems
  • Dividend policy
  • Mergers and acquisitions

Learning outcome knowledge

After taking the course, the students shall be able to explain key concepts and give an account of the tools used in analyses of corporate finance problems (these tools include methods, techniques, models, theories, etc. applied in the subject area). Some examples of the concepts that students shall be able to explain are:

  • Differentiation between the advantages and/or disadvantages of different financing instruments
  • Capital structure decisions in different tax regimes
  • How dividend decisions might affect firm value
  • The difference between a merger and an acquisition.

 

Exam organisation

  • Multiple choice: 100%