• Understand the role of corporate finance in investment and financial decisions of firms.
• Calculate and interpret market value, market value added and some key measures of firm efficiency
• Relate time value to money.
• Apply the present value techniques in valuing bonds and stock.
• Compare the net present value and different investment criteria in capital budgeting decisions.
• Do a project analysis
• Measure risk and understand the relationship between risk and return
• Determine how to minimize a company’s risk
• Calculate a firm’s capital structure
• Explain the effects of inflation on cost of capital
• Identify the relationship between a company’s capital structure and marginal cost of capital.
• Explain how borrowing is related to the value of the company, and how financial distress can lead to an optimal capital structure. And Compare various current asset management techniques

This course is an overview of the principles of corporate finance. Importance is placed on techniques related to investment decisions and financial decisions made by companies. Financial managers in corporations work with other managers to identify investment opportunities, to analyze and value the opportunities and to decide whether and how much to invest, as well as decide how to raise the money to finance corporation’s investments.
Therefore we start with an introduction of what a corporation is, and describe the role of a corporation’s financial manager. We then proceed with how to measure corporate performance (value added, efficiency, profitability etc), since the main goal of corporations is maximizing the current market value.
Since companies invest in a lot of things such as tangible or intangible assets, the decision on capital outlays is among the most significant a firm will have to make. In introducing decision making on capital expenditure, first the students will be exposed to “time value of money” calculations and then proceed to the fundamentals of valuation of bonds and stocks, emphasizing present value techniques. These techniques will be also useful during capital budgeting decisions, which involve comparing the different investment criteria in the presence of capital shortage. After careful grounding in valuation practice and theory, the concepts of the cost of capital and capital structure will be examined, covering risk-return analysis in capital budgeting. Finally, the course introduces the role of debt financing to the value of the company and compares the different asset management techniques.

The course is especially integrated with the ASP courses in Microeconomics and Managerial Economics, as well as the other courses at the 1st, 2nd and 3rd year.

Course Literature:

Main Text Book
Richard A. Brealey, Steward C. Myers, and Alan J. Marcus. Fundamentals of Corporate Finance. Sixth edition, McGraw Hill.

Case Studies Book
StanleyBlock, Geoffrey Hirt. Case Book on Fundamentals of Corporate Finance. 12^th edition. McGraw Hill.
The cases to be used in the course will be interpreted from an Asian perspective.