Corporate Finance

Course pre-requisite(s): None

Course Overview

The corporate finance is concerned with three long-term and inter-related financial decisions: investment, financing, and dividend policy. In order to outlay the proper foundation for the study of these three decisions the course starts with an explanation of corporations, corporate governance, financial statements, and the concept of time value of money. In addition, it explains financing theories related to the estimation of returns (CAPM and APT). 

Learning Outcomes

By the end of this course students are expected to:

  1. Describe the managerial finance function, the goal of the firm, corporations as legal entities and basic corporate governance elements.
  2. Understand the concept of cash flows and time value of money and be able to apply the basics of investment appraisal techniques. It is expected that students will be proficient in carrying project appraisals.
  3. Understand the importance of the capital structure of firms and the concept of the cost of capital and solve practical problems relating to the financing procurement.
  4. Understand the importance of dividend policy and other payouts.
  5. Acquire the ability and confidence to tackle common financial problems in practice.

 

Course Content

  • Introduction to Corporate Finance, Financial Statements and Cash Flow
  • Discounted Cash Flow Valuation, Net Present Value and Other Investment Rules
  • Making Capital Investment Decisions
  • Risk and Return: lessons from market history
  • Return and Risk: the capital asset pricing model
  • An Alternative View of Risk and Return: the Arbitrage Pricing Theory
  • Risk, Cost of Capital, and Capital Budgeting
  • Efficient Capital Markets and Behavioral Challenges
  • Capital Structure
  • Dividends and Other Payouts

Instructional Method

This course is mainly given through lectures. Students will be required to solve problems at the end of each topic. These problems are expected to be solved individually.

Required Course Materials

The main reading is: Corporate Finance, Ross, Westerfield, Jordan, and Bley 9latest edition). Other corporate finance texts will be recommended.

Assessment

60% group project presented at the end of the course and 40% final written exam.