3 (ECTS) - 24 Contact Hours

This course consists of two parts and focuses on the, so-called, core issues in Corporate Finance. The first part analyses the capital budgeting and valuation tools, whereas the second part deals with optimal capital structure and payout policy. We will start by introducing the tools to discount and evaluate risky investment decisions. Once having learned those tools, we can apply them to choose between different risky investments, a process called capital budgeting. In a second step, we will learn how to use the discount model to evaluate stocks and bonds. This leads us to introduce the notion of equilibrium asset pricing. We will then move to the second part, which addresses one of the fundamental questions in Corporate Finance, namely how to choose the optimal capital structure (debt/equity) of the firm. We will analyze how, due to the asymmetry of information and other frictions, the debt policy influences the value of the firm. Finally, we discuss the optimal payout policy of the free cash flow.

RF106 - Corporate Finance Course Outline 2016.pdfRF106 - Corporate Finance Course Outline 2016.pdf