Corporate Finance

• Credit value: 30 credits at Level 6
• Tutor: Dr David Schroeder
• Prerequisites: basic understanding of valuation and portfolio choice principles, as presented in Principles of Finance; probability theory
• Assessment: final examination in May/June (70%), coursework (20%) and a company challenge (10%)

In this module you will gain a thorough understanding of the foundation of modern corporate finance with applications to business decisions.

First, we re-examine basic pricing and valuation principles from the perspective of the financial manager of a firm. We will discuss how to evaluate investment projects using the net present value criterion, first considering investments in a risk-free world, but then extending the analysis when risk considerations are necessary. We then turn to the core concepts of corporate finance, the controversies surrounding the irrelevance of dividend and debt policies.

A particular focus will be on the principal-agent conflicts that impact the optimal decisions of a firm. Finally, we will look into option pricing, and its application to investment decisions.

Company challenge

Besides the lectures, you will take part in a 'company challenge' in which you analyse a company of your choice along the dimensions of corporate finance studied in the module.

By the end of this module, you will be able to assess the corporate finance aspects of any company.