• analyze where to invest a firm’s resources.
• explain the different funding options for a firm and analyze the best funding option in a given context.
• determine a firm's optimal payout policy.
• analyze how corporate decisions are influenced by agency problems and explain how agency problems can be countered.
• understand and explain modern capital structure theory.
• apply option pricing models to make financial decisions.
• explain and describe patterns which can be found in M&A's.
• understand a firm’s risk management strategy and determine its best risk management strategy

Aim of the course

The aim of the course is to provide students with the capacity to understand and apply the theories, models, and techniques that have been developed in corporate finance.

Contents

This course introduces students to the fundamentals of Corporate Finance. The first part of the lectures will discuss the building blocks of the modern firm in detail. This includes the institutional background of firms and corporate governance as well as reporting, capital budgeting and cost of capital. After having investigated the main funding sources for firms such as equity and debt, students will learn about the theoretical concepts underlying modern Corporate Finance. Finally, the use of a firm’s proceeds is discussed in more detail followed by valuation, restructuring and M&A of firms.
 
The following topics are treated: corporate governance, corporate reporting, capital  budgeting - project evaluation and cost of capital, long-term financial planning - equity and debt, capital structure theory, payout policy, financial modeling, financial and real options, mergers and acquisitions

Preliminary literature.

Berk, J., P. DeMarzo (2013). Corporate Finance, 4th Edition (Global). Pearson.

ISBN-10: 0-273-79202-4

ISBN-13: 978-0-273-79202-4

Selected journal and newspaper articles