Students study the following broad questions. How should a firm decide whether to invest in a new project? How much debt and equity should a firm use to finance its activities? How should a firm pay its investors? How do taxes affect a firm’s investment and financing decisions? What determines the value of a firm? After studying this course, students will have the capibilities to answer those questions and issue valuation reports for a company.
1.Introduction
1.1 What is the Corporate Finance?
1.2 What is the goal of a corporation?
Quiz 1
2. Introduction of Investment Decisions
Quiz 2
2.1 Time Value of Money
2.2 The Application of Time Value of Money
3.Methods of Investment Decisions
3.1 Investment Criteria
Quiz 3
3.2 Some Special Cases
4. Applications of Investment Decisions
4.1 Identifying and Estimating a Project's Cash Flows
4.2 Estimating the Cost of Capital
Quiz 4
5.Theory of Financing Decisions I
5.2 Modigliani-Miller Theorem Without Taxes
5.1 The Introduction of Capital Structure Problems
5.3 Modigliani-Miller Theorem With Taxes
Quiz 5
6.Theory of Financing Decisions II
6.3 Information Asymmetry and the Pecking Order Theory
6.2 Agency Problems and the Trade-off Theory
Quiz 6
6.1 Financial Distress and the Trade-off Theory
7.Capital Budgeting and Valuation with Leverage
7.1 The Weighted Average Cost of Capital Method (WACC)
7.3 The Flow-to-Equity Method (FTE)
Quiz 7
7.4 Summary
7.2 The Adjusted Present Value Method (APV)
8.Allocation Decisions
Quiz 8
8.2 Allocation Decisions in an Imperfect Market
8.1 Allocation Decisions in a Perfect Market
The students may have or may not have knowledge of basic principles of accounting.
1. Corporate Finance: the Core, Johnathan Berk and Peter DeMarzo and , 4th Edition, Pearson Publication
2. Fundamentals of Corporate Finance, Stephen Ross, 11th Edition, McGraw-Hill Education
3. Finance for Executives: Managing for Value Creation, Gabriel Hawawini and Claude Viallet, 5th Edition, Cengage Learning