DECO 27A26 - Corporate finance

The goal of this course is to provide students with an advanced understanding of how firms make investment and financing decisions. It focuses on three key aspects of modern corporate finance: capital budgeting, financing, and capital structure.

Capital budgeting examines how firms make investment decisions to maximize their value. The course applies the fundamental concept of the time value to capital budgeting decisions. Various investment decision criteria are introduced, along with the calculation of free cash flow.

Next, the course explores the financing options available to firms, specifically equity and debt. For the equity market, several stock valuation methods are discussed in detail. Regarding the debt market, the course covers general bond valuation methods as well as corporate bonds.

In the final part, the course combines equity and debt to introduce the concept of the weighted average cost of capital (WACC), which links a firm’s capital budgeting decisions with its financing strategy.

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The course assessment is based on three main components:

Class Participation (10%):

Class participation will account for 10% of your final grade. Active engagement in discussions, asking questions, and contributing to group activities are essential to demonstrate your understanding and involvement in the course

Mid-term Exam (30%):

The mid-term exam will consist of a Multiple-Choice Questionnaire (MCQ), designed to test your understanding of the key concepts covered in the first half of the course. This exam will take place during class and will account for 30% of your final grade.

Final Exam (70%):

The final exam, held in class, will cover all the topics discussed throughout the course. It will consist of a combination of problem-solving exercises, and theoretical questions to assess your ability to apply the concepts learned. This exam will contribute 70% to your overall grade.

All three components are designed to evaluate not only your theoretical knowledge but also your ability to apply financial concepts to real-world situations.