Corporate Finance

URL study guide

https://studiegids.vu.nl/en/courses/2024-2025/E_EBE2_CF

Course Objective

Corporate Finance studies firms as economic decision makers. The goal of this course is to develop a framework that provides guidance for investment and financing decisions. This requires not only a fundamental understanding of most common corporate finance theories, but also a selection of sensible applications for them. Our main decision criterion is based on value creation, which we will learn to quantify in a flexible valuation model. Practical applications for the knowledge are widespread and not only of interest to managers, but part of a toolkit required by everyone who is dealing with financial markets. Learning objectives: Academic and Research Skills At the end of the course, you will be able to:
- explain which financial decisions create value and why this is the case;
- appreciate model assumptions, and understand how they affect the conclusions of a theory;
- distinguish between relevant and irrelevant information for corporate financing decisions. Bridging Theory and Practice
- Knowledge At the end of the course, you will be able to explain:
- the Modigliani–Miller Theorem;
- common capital structure theories;
- corporate payout policies;
- valuation methods;
- mergers and acquisitions;
- corporate governance mechanisms. Bridging Theory and Practice
- Application At the end of the course, you will be able to:
- quantify the value of a corporate decision, a project, or an entire company;
- derive guidance for corporate decisions based on academic theories.

Course Content

This course offers an introduction for students with interests infinancial markets or the intent to pursue a career in finance. Weattempt to provide a sound mix between formal/quantitative analysis andqualitative discussion. From a modeling perspective, we extend methods learned in Finance I and II and put them into a corporate setting. When talking about value-driving factors, we see links to Economics and Management of Organizations. Overall, the content learned in this course enables students to understand corporate decisions/valuations by reducing complex problems to its key components.

Teaching Methods

Lectures and tutorials.

Method of Assessment

Case study assignment (group assessment) Midterm Quiz and Final Written Exam (individual assessment)

Literature

J. Berk and P. DeMarzo, Corporate Finance, Pearson, 5th Global Edition

Additional Information

Completing this course (or alternatively a corporate finance course in the other BSc tracks) is a prerequisite for the MSc Finance and a recommended course for the MSc Business Administration
- specialization Financial Management.

Recommended background knowledge

Finance I and II.