Advanced Financial Management 2600-MRCz1ZZF
Lecture:
1. Principles of corporate finance. Classical and behavioural approaches to corporate financial decisions. Corporate objectives.
Value and utility.
2. Capital market efficiency. Forms of market efficiency. Value of information. Expectations theory. Capital-market anomalies.
Forms of efficiency and corporate decisions.
3. Investment decisions. Criteria for project appraisal under certainty and risk. Efficiency assessment for different groups of stakeholders. Short- and long-term analysis - potential conflicts.
4. Corporate decisions on the choice of sources of financing. Selection criteria. Types of capital. Equity. Debt. Hybrid financing. Risk analysis.
5. Corporate dividend policy. Taxes and dividends. Behavioural dividend payout policies. Optimisation of dividend payouts.
Dividends and firm value. Signalling theory. Share repurchases.
6. Risk and return. CAPM and APT models. Multifactor models.
7. Cost and structure of capital. Taxes and the cost of capital. Agency costs. Costs of financial distress. Cost of capital and firm value.
Optimisation of capital structure.
8. Linking investment and financing decisions. Risk analysis. Investment efficiency assessment for different groups of stakeholders.
9. Use of real options in corporate finance. Financial options and real options. Types of real options in an enterprise. Valuation models.
10. Working capital management. Trade credit. Receivables. Inventories. Cash. Working capital optimisation models.
11. Short-term sources of financing. Cash flow forecasting.
12. Mergers and corporate restructuring. Valuation of synergy effects. Alternative growth strategies: joint ventures, strategic alliances.
13. Financial management in international markets. Valuation of cash flows and the cost of capital for international investment projects. Project appraisal taking exchange-rate risk into account.
14. Agency problems and corporate governance in the enterprise. Ownership and control. Executive incentive systems.
15. Unresolved problems in finance.
Classes:
1. Principles of corporate finance. Classical and behavioural approaches to corporate financial decisions. Corporate objectives.
Value and utility.
2. Capital market efficiency. Forms of market efficiency. Value of information. Expectations theory. Capital-market anomalies.
Forms of efficiency and corporate decisions.
3. Investment decisions. Criteria for project appraisal under certainty and risk. Efficiency assessment for different groups of stakeholders. Short- and long-term analysis - potential conflicts. Case study.
4. Corporate decisions on the choice of sources of financing. Selection criteria. Types of capital. Equity. Debt. Hybrid financing. Risk analysis.
5. Corporate dividend policy. Taxes and dividends. Behavioural dividend payout policies. Optimisation of dividend payouts.
Dividends and firm value. Signalling theory. Share repurchases. Case study.
6. Risk and return. CAPM and APT models. Multifactor models. Case study.
7. Cost and structure of capital. Taxes and the cost of capital. Agency costs. Costs of financial distress. Cost of capital and firm value.
Optimisation of capital structure. Case study.
8. Linking investment and financing decisions. Risk analysis. Investment efficiency assessment for different groups of stakeholders.
9. Use of real options in corporate finance. Financial options and real options. Types of real options in an enterprise. Valuation models. Case study.
10. Working capital management. Trade credit. Receivables. Inventories. Cash. Working capital optimisation models.
Case study.
11. Short-term sources of financing. Cash flow forecasting. Case study.
12. Mergers and corporate restructuring. Valuation of synergy effects. Alternative growth strategies: joint ventures, strategic alliances. Case study.
13. Financial management in international markets. Valuation of cash flows and the cost of capital for international investment projects. Project appraisal taking exchange-rate risk into account. Case study.
14. Agency problems and corporate governance in the enterprise. Ownership and control. Executive incentive systems.
15. Unresolved problems in finance.
Type of course
Learning outcomes
After completing the course, the student:
In terms of knowledge:
• knows and understands, in an in-depth manner, research methodology and terminology in the discipline of management and quality sciences and in supplementary disciplines (economics and finance, legal sciences), in particular in the area of financial management and accounting (K_W01);
• knows and understands, in an in-depth manner, economic theories and models concerning the functioning of organisations and the economy as a whole (K_W03);
• knows and understands the impact of global technological, socio-economic, and ecological processes on strategic financial decisions in organizations and systemic risk in the economy. (K_W05);
• knows and understands the principles of creating and financing various forms of entrepreneurship and business models in both national and global dimensions. (K_W07);
In terms of skills:
• is able to use the theory of the discipline of management and quality sciences and supplementary sciences (economics and finance, legal sciences) to identify, diagnose and solve problems related to financial decisions in an organisation and the management of financial institutions, applying an appropriate selection of sources and adapting existing methods or developing new ones (K_U01);
• is able to correctly interpret complex technological, social, political, legal, economic and ecological processes and phenomena and their impact on financial decisions in organisations, the functioning of organisations and the economy as a whole, applying an appropriate selection of sources (K_U02);
• is able to independently and collaboratively prepare analyses, diagnoses and reports concerning complex and non-standard problems related to financial management in organisations, accounting, management of financial institutions and strategies of financial institutions, and present them clearly, also in English, using information and communication tools (K_U07);
• is able to plan, organise and lead teamwork (K_U06);
• has the ability to engage in self-learning, improve acquired qualifications and support others in this respect (K_U09).
In terms of attitudes:
• is ready to think and act entrepreneurially in national and global dimensions (K_K04).
• is ready to adhere to and develop professional ethical standards in finance, and to maintain transparency and the advancement of the financial profession. (K_K05).
Assessment criteria
Classes:
Final test (80%), homework assignments (20%)
Lecture:
Written examination - on-site, theoretical multiple-choice questions and calculation tasks.
Only students who have completed the classes may take the examination.
Admission to the examination is conditional on completing the classes. Completion of classes: final test (80%) and homework assignments (20%). Completion of the course: written examination (test + calculation tasks).
Practical placement
-
Bibliography
Core literature:
• Brealey R.A., Myers S.C., Allen F. Principles of Corporate Finance (13th ed.), McGraw-Hill, 2019 (Polish translation: Brealey R.A., Myers S.C., Podstawy finansów przedsiębiorstw, Wydawnictwo Naukowe PWN, Warsaw 1999)
Supplementary literature:
• Berk J., DeMarzo P., Corporate Finance, 6th edition (or an earlier edition), Pearson 2023.
• Gruszczynski M., Finanse przedsiębiorstwa, Difin, Warsaw 2012.
• Gajdka J., Walinska E., Zarządzanie finansowe: teoria i praktyka, FRR, Warsaw 2000.
• Selected articles, among others, from: Journal of Applied Corporate Finance, McKinsey on Finance, The Economist.