Corporate Finance 2600-0550211018
1. Introduction (Area of Finance, Agency Problems, Value and Options)
2. Capital Budgeting under Conditions of Certainty (Time Value of Money, Capital Budgeting Criteria: Net Present Value, Internal Rate of Return, Payback Period, …, Cash Flow Valuation, Non-profit Investment)
3. Cost of Capital (Cost of Capital Component, Debt, Common Equity, Preferred, WACC)
4. Capital Structure Decisions (Overview Capital Structure Effects, Business versus Financial Risk, Capital Structure Theory)
5. Option Pricing with Application to Real Options (Introduction to Option Pricing Models, Introduction to Real Option, Flexibility and Value)
6. Financial Statement Analysis (Quality of Assets, Quality of Earnings, Ratio Analysis, Economic Value Added - EVA, MVA)
7. Working Capital Management (Alternative Working Capital Policies, Criteria of Evaluation of Short-term Borrowing, Preparation of Cash Budget)
8. Mergers & Acquisitions (Types of Mergers, Synergy Valuation, Merger Analysis, Leveraged Buyout, Company Valuation)
Type of course
Course coordinators
Learning outcomes
Upon successful completion of the course, the student will be able to:
• Assess the financial condition firms and identify hidden assets and hidden liabilities,
• Identify relationships among operating, investment and financial decisions,
• Identify relevant cash flows that are the effects of economic actions,
• Analyse and describe ventures in terms of cash flow and risk,
• Analyse and describe ventures in terms of cash flow (and cost of capital) from different stakeholders point of view,
• Identify main sources of financial risk,
• Assess a company’s value using DCF methods under condition of certainty and uncertainty,
• Analyse and assess the external financial needs to finance particular ventures,
• Analyse and choose the optimal sources of financing in short and long-term,
• Identify and assess flexibilities using real option approach.
Assessment criteria
Written exam, team project work, written assignments . The grade composition is as follows:
• Team project - 20%
• Class participation- 10%
• Final examination - 70%
Additional information
Additional information (registration calendar, class conductors, localization and schedules of classes), might be available in the USOSweb system: