The Corporate Finance course offers students a discussion of the key areas of corporate finance needed by today's corporations to compete and succeed in today's global economy. The course introduces the process of decision-making in the field of financing and investment and teaches how to correctly interpret their impact on the creation of company value. The main topics covered include accounting and financial model of corporate analysis, time value of money, discounted cash flow (DCF) analysis, fundamentals of debt and equity valuation, net present value, internal rate of return, hurdle rate, payback period, risk-return tradeoff, cost of capital and capital structure choices. The course has both a theoretical and practical focus and is based on modern fundamental and periodical literature, including the analysis of practical situations (cases).
Learning Objectives
The goal of this course is the formation of a modern system of knowledge and skills that allows students to justify financial and investment decisions at the company level. The course provides necessary knowledge in evaluating different management decisions and their influence on corporate performance and value.
Expected Learning Outcomes
To understand why it is important to study corporate finance
To explain how a company's decisions change depending on the stage of the life cycle
To know the functions of the Chief Financial Officer (CFO) and his/her place in the organisational structure of the company
To prepare and analyze companies' financial statements and financial ratios for decision-making purposes
To know the main sources of company financing
To perform valuation of company's bonds and shares
To gain experience in searching for information on bonds and shares of companies
To make a justified investment decision applying project analysis and evaluation of multiple investment criteria.
To know the differences between the financial model for analysing a company and the accounting model.
To calculate the expected rate of return and volatility for a portfolio of investments and describe how diversification affects the returns to a portfolio of investments
To understand the concept of systematic risk for an individual investment and calculate portfolio systematic risk (beta)
To estimate an investor's expected rate of return using the CAPM model
To understand the concepts underline the company's overall cost of capital and the purpose for its calculation.
To evaluate a company's capital structure, and determine the relative weight of each source of financing.
To calculate a company's weighted average cost of capital (WACC).
To explain why firms have different capital structures and how capital structure influences a firm's WACC
To describe some fundamental differences in industries that drive differences in the way they finance their investments.
Course Contents
Introduction to the Course. The Role of a Financial Manager in a Company
Introduction to Financial Statement Analysis
The Company's Decisions on Sources of Funding
Investment Decisions of the Company
Risk and Return. Capital Market Theory
The Cost of Capital and Capital Structure.
Assessment Elements
Class work during lectures and classes
Home assignment
Team project
Final exam
Interim Assessment
2023/2024 4th module
0.1 * Class work during lectures and classes + 0.1 * Class work during lectures and classes + 0.3 * Final exam + 0.2 * Home assignment + 0.3 * Team project
Bibliography
Recommended Core Bibliography
Corporate finance, Berk, J., 2007
Corporate finance, Brealey, R. A., 2006
Fundamentals of corporate finance, Berk, J., 2012
Recommended Additional Bibliography
Cost accounting : a managerial emphasis, Horngren, C. T., 2015
Satran, R. (2013). Breaking Into Wall Street. U.S. News Digital Weekly, 5(17), 8.
Course Syllabus
Abstract
Learning Objectives
Expected Learning Outcomes
Course Contents
Assessment Elements
Interim Assessment
Bibliography
Recommended Core Bibliography
Recommended Additional Bibliography
Authors