Corporate Finance

 

Instructor: Mario Levis

Teaching Hours and Credit Allocation: 24 hours, 6 credits
Course Assessment: Coursework + Exam

 

Aims

The aims of the course are to familiarise course participants with the role of finance in business: to help understand the nature of available financial instruments and determinants of the prices of marketable securities; to be familiar with methods of risk management and desirable corporate debt structures.

 

Learning Outcomes

On successful completion of this course students will:

  • Know and apply the most important tools of corporate finance: the valuation methods, the measurement of the impact of institutional settings, information asymmetries and agency costs on firm’s decisions, and the assessment of the market values of firms’ decisions
  • Understand and interconnect corporate finance decisions into the overall financial strategy of firms
  • Understand how the incentives of different managers and financial institutions (e.g., investment banks, insurance and pension funds, hedge funds) differ from each other and assess the impact of these differences upon their corporate finance decisions and overall financial performance

 

Content

  • Valuation of income streams: present values, annuities, perpetuities, bonds
  • Investment appraisal: the net present value rule and alternative decision criteria
  • Risk and return: portfolio diversification and the capital asset pricing model
  • Capital budgeting and risk
  • Valuing debt: term structure and yields to maturity, duration and volatility, credit risk, different kinds of debt
  • Company valuation
  • Sources of long, medium and short term debt; maturity structure of corporate debt
  • Dividend policy: dividends and retained earnings; how do companies decide on dividend payments
  • Mergers and Acquisitions: merger motives, regulation of mergers, valuation and payment methods