Corporate Finance I

 

Instructor:

Elena M. Rogova, Professor, Doctor of Science, Dean, Higher School of Economics, St.-Petersburg branch
E-mail: erogova@hse.ru

Workload:

6 ECTS,

45 contact hours

Prerequisites:

No

Course Description:

The key aim of the course is to provide students with knowledge and skills in taking corporate financial and investment decisions, develop analytic instruments to assess the effectiveness and efficiency of such decisions, elaborate models of corporate financial management.

Students should acquire following competences:

  • Knowledge:

Modern concepts of corporate finance;
Principles of the corporate financial policy;
Principles of investment decision-taking
Methods of project efficiency measurement
Basic principles of financial tools valuation

  • Abilities

To apply modern models for the analysis of capital structure, dividend policy, the financial architecture of the company, financial corporate control and corporate governance,
To reveal the fundamental factors affecting corporate financial and investment decisions;
To evaluate the efficiency of investment projects of different types,
To calculate the cost of capital, to analyze empirical data that determines risk factors;
To build a long-term and short-term financial models, describing the company's growth;

  • Skills:

Analysis of the corporate capital structure;
Calculating the need for external financing of the corporation;
Estimation of elements of capital;
Investment decision-taking;
Investment projects analysis

Course Content:

Topic 1. Goals and Government of the Firm
1. Corporate investment and financing decisions
2. The role of the financial manager and the opportunity cost of capital
3. Goals of the corporation
4. Agency problems and corporate governance

Topic 2. Financial analysis and financial modeling. Growth management
1. Principles of financial modeling.
2. Corporate growth strategies and their modeling

Topic 3. Introduction to Capital Markets and Investment Decision
1. Principles of investment decisions
2. DCF model. Net Present Value
3. Project analysis and capital budgeting

Topic 4. Calculation of cost of capital
1. Concept of cost of capital and its role in the modern corporate financial
management.
2. Portfolio theory and CAPM
3. Stock valuation principles
4. Alternative approaches to the analysis of costs of equity
5. Bonds valuation. Cost of debt
6. Valuation of hybrid funding
7. The weighted average cost of capital (WACC)

Topic 5. Options
1. Definition of options
2. Valuing options: binomial model and Black-Scholes model
3. Constructing self-financing portfolio
4. Real options: definition and applications

Course Organization:

Lectures and seminars, problem solving, home assignments.

Course Reading (the full list):

Core reading:
[BMA9] Brealey R.A., S.C. Myers, and F. Allen. Principles of Corporate Finance, 9th ed., McGraw-Hill, 2008
[Dam3] Damodaran A. Applied Corporate Finance. 3rd Edition. John Wiley and Sons Ltd., 2011 (access online at: www.damodaran.com)

Supplementary reading:
[BdM] Berk J., DeMarzo P. Corporate Finance. Second Edition. Boston: Pearson Education, 2011

Exam format:

in-class, closed book, duration – 90 minutes.

Grading Policy (% or points):

Course progress – 50 %, exam – 50 %.
Course progress consists of home assignments and midterm exam

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