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The ultimate goal of our Corporate Finance module is understanding how companies finance the assets required to run their operations. As the most fundamentally different funding instruments are equity and debt, we aim for making the optimal choice in the mix between the two, i.e., finding the optimal capital structure for the company.

In reality there are many nuances of funding possibilities to be tailored for the particular case. We will see use cases for hybrid debt and preferred equity, secured vs. unsecured debt finance, callable bonds, convertibles, and important dimensions of debt finance such as seniority, maturity, currency and coupon structure, private and publics placement. Also, the use of derivatives such as swaps, futures/forwards and options will be analysed on some introductory level.

All the above will be reflected from both perspectives: the corporate funder and the investor. We will structure this by first taking the investor view of equity and bonds in their function of being assets. In the second part of the module, we analyse their function on the liability side of the funding corporate. Here we also see how the mechanism of funding operations (e.g., initial public offerings) and reversals (e.g., dividend payment on stock repurchases) work. In this context we familiarise us with the important role of investment banks.

This module is usually taught in an intensive, multiple day format.Ìý

Learning outcomes:Ìý

On completion of this module students will be able to:
• interpret and demonstrate knowledge of the most recent research in banking and financial products
• demonstrate understanding of exchange rates, interest rates and securities
• identify differences in corporate finance between small and large enterprises, and differentiate between Listed and Unlisted corporations
• explain and analyse decision-making processes between firms and financial institutions in regard to financial mix, investment, and risk assessment
• demonstrate knowledge of capital budget decisions under uncertainty, financial market efficiency, corporate governance, takeovers, and extraordinary financial operations
• make reasoned banking and financial management decisions with regard to investment
• apply quantitative problem-solving skills, applicable to complex financial decisions at different scales