5122 - CORPORATE FINANCE

The course explores investing and financing decisions, focusing on their role in the creation of value for shareholders. Corporate applications of financial theories are thoroughly examined from both financial policies and financial management stanpoints. The course provides an introduction to the operative functions of the Chief Financial Officer and the Corporate Treasurer. The program consist of the following five modules: 1) Objectives, functions and instruments of corporate finance; 2) Instruments for financial analysis and planning; 3) Risk and return; 4) Capital budgeting; 5) Corporate financial structure.

1. The role of the financial manager and the net present value rule 

2. Using present value formulas to value bonds and equity

3. Financial analysis, planning and short term planning 

4. Risk, return and the opportunity cost of capital 

5. Capital asset pricing model 

6. Estimating cash flows and investment decisions with the net present value rule 

7. Capital budgeting and risk: measuring betas and the company cost of capital 

8. MM theory, costs of financial distress and pecking order theory

• J.C. VAN HORNE, Financial Management & Policy, 12th ed., Prentice Hall, 2002. Chapters 1, 2, 3, 6, 8, 9, 10, 13. 

A mid term written examination may be taken. At the end of the Course there will be an oral examination.