Corporate Finance

Introduction

The module deals with the major issues related to financial management in firms. It is organised around three major topics: Determining economic value, economic project analysis, and financing of the firm. Though the focus is on private firms, the methodology used to analyse financial decisions is also relevant for public firms.

Course content

Determining economic value:

• Cash flow analysis
• Methods for determining economic value
• The value of bonds and stocks

Economic project analysis:

• Criteria
• Making investment decisions

Risk and return
Financing the firm:

• Cost of capital
• Financial strategy: How much debt?

Approximately 1 day will be spent on the topic “Determining economic value” and 1½ day on “Economic project analysis”. The final 1½ will be spent on “Risk and return” and “Financing the firm”. Problems and mini-cases will be used throughout to exemplify and familiarise the students with the issues discussed in class.