Introduction
This course will introduce you to Corporate Finance. The main objective of the course is to provide you with insights and practical tools that will help you make sound corporate financial decisions. In other words, financial decisions that create long-term value. The course will show that creating long term value can be equivalent to accounting for environmental, social, and governance (ESG) issues in decision making.
The course covers two broad topics:
Part I: Financial Policy and the risk-return trade-off.
In Part I, we will examine the factors that determine a company’s need for external financing, be it debt or equity. We will then consider the optimal mix of debt and equity financing. We will also introduce you to the trade-off between risk and return in capital markets.
Part II: Valuation.
In Part II, we will develop the tools needed for valuing investment projects, including the estimation of relevant project cash flows, estimating the cost of capital (discount rate), and dealing with risk. We will then use these tools as a basis for selecting investment projects and valuing companies and corporate transactions (including, but not limited to a merger or an acquisition).