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Бакалаврская программа «Совместная программа по экономике НИУ ВШЭ и РЭШ»

Corporate Finance

2021/2022
Учебный год
ENG
Обучение ведется на английском языке
6
Кредиты
Кто читает:
Школа финансов
Статус:
Курс по выбору
Когда читается:
3-й курс, 1, 2 модуль

Преподаватель

Course Syllabus

Abstract

The main objective of the course is to present the modern approach to the financial analysis of a company and to teach the principles and techniques of evaluating the most important corporate decisions. The core of the course is the analysis of investment (capital budgeting) and financing (capital structure) decisions of a firm. We will first discuss the principles and techniques of selecting investment projects. Secondly, we will examine the determinants of the capital structure choices by firms as well as the notion of the optimal capital structure. We will then discuss how to value a company, taking into account its capital structure. We will also analyze how firms decide on their payouts to shareholders and what the optimal payout policy should be. Finally, time permitting, we will cover some special topics, such as initial public offerings, corporate governance, mergers and acquisitions, behavioral corporate finance.
Learning Objectives

Learning Objectives

  • To present the modern approach to the financial analysis of a company
  • To teach the principles and techniques of evaluating the most important corporate decisions: investment, capital structure, payout policy.
  • To provide understanding of factors/forces that affect firm value
  • To develop fundamental valuation skills
Expected Learning Outcomes

Expected Learning Outcomes

  • Ability to build valuation models.
  • Ability to compute tax advantage of debt, understanding of the trade-off theory of capital structure.
  • Comprehension of the effects of agency problems and asymmetric information on capital structure
  • Comprehension of various approaches to assess the value of a company, ability to compare these approaches.
  • Understanding of firms’ motives to go public, IPO mechanisms, IPO pricing and performance.
  • Understanding of the basic principles and concepts of accounting
  • Understanding of the concept of real options, knowledge of techniques of real option valuation
  • Understanding of the impact of managers’ and investors’ behavioral biases on corporate policies.
  • Understanding of the key corporate governance mechanisms and their effect on the cost of external capital and value of companies
  • Understanding of the Modigliani-Miller theorem and the effect of leverage on the cost of equity.
  • Understanding of the payout policy choices of firms, ability to evaluate payout policies
  • Understanding the motives, sources of value creation/destruction, and negotiation aspects of M&A transactions.
Course Contents

Course Contents

  • Introduction to corporate finance. Notion of corporation, financial statements and financial ratios
  • 2. Fundamentals of capital budgeting
  • Advanced capital budgeting: real options
  • Capital structure
  • Initial public offerings
  • Capital budgeting and valuation with leverage
  • Payout policy (dividends and stock repurchases)
  • Corporate governance
  • Mergers and Acquisitions
  • Behavioral corporate finance
Assessment Elements

Assessment Elements

  • non-blocking Problem sets
    5-6 problem sets to be solved individually.
  • non-blocking Cases
    3-4 cases to be solved in groups of 3 to 4 people, with subsequent student presentations in class. Cases are real-life situations in which you will have to put yourselves in the shoes of managers taking real-life decisions.
  • non-blocking Midterm test
    There will be no re-take for the midterm. If you have to skip the midterm due to a valid documented reason, the final will automatically carry 56% weight. If you skip the midterm for no valid reason, you simply get 0 points for it.
  • blocking Final test
Interim Assessment

Interim Assessment

  • 2021/2022 2nd module
    0.22 * Problem sets + 0.22 * Cases + 0.22 * Midterm test + 0.34 * Final test
Bibliography

Bibliography

Recommended Core Bibliography

  • Corporate finance, Berk, J., 2014

Recommended Additional Bibliography

  • Baker, M., & Wurgler, J. (2013). Behavioral Corporate Finance: An Updated Survey. Handbook of the Economics of Finance, 357. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.h.eee.finchp.2.a.357.424
  • Financial markets and corporate strategy, Hillier, D., 2012
  • Financial theory and corporate policy, Copeland, T. E., 2005
  • Malmendier, U., 2018. Behavioral corporate finance. In Handbook of Behavioral Economics: Applications and Foundations 1 (Vol. 1, pp. 277-379). North-Holland.