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Applied Corporate Finance

Objectives

The main aim of this course is to enable you to apply the theoretical concepts in finance, covered in the core introductory finance courses, to problems in the area of corporate finance with all the complexities that the real world entails.


General characterization

Code

2232

Credits

7

Responsible teacher

Rui Silva | Irem Demirci

Hours

Weekly - Available soon

Total - Available soon

Teaching language

English

Prerequisites

n/a 


Bibliography

Bruner, Robert, 2000, Note to the Student: How to Study and Discuss Cases 

Brealey, Myers and Allen (10th ed.) chapters 18 and 19. (How Much Should a Corporation Borrow? and Financing and Valuation)

Andrade, G., Mark Mitchell and Erik Stafford, New Evidence and Perspectives on Mergers, The Journal of Economic Perspectives, Vol. 15, n. 2, Spring 2001, 103-120. 

McDonald, Robert L, The Role of Real Options in Capital Budgeting: Theory and Practice, Journal of Applied Corporate Finance (Spring 2006), v. 18, n. 2, 28-39. 

Barclay, M J and C W Smith: On Financial Architecture: Leverage, Maturity and Priority, The New Corporate Finance: Where theory meets practice, Donald H Chew, Jr, Irwin McGraw-Hill, 2nd edition, 230-243. 

Stulz, Rene M, 1995, Globalization of Capital Markets and the Cost of Capital: The Case of Nestle, Journal of Applied Corporate Finance, Volume 8, Number 3. 

La Porta, R., Florencio Lopez-de-Silanez, Andrei Shleifer, and Robert Vishny, Agency Problems and Dividend Policies around the World, The Journal of Finance, Vol. LV, No 1, February 2000. 

Esty, B.C., Improved Techniques for Valuing Large-Scale Projects, Journal of Project finance, Spring 1999, Vol.5, n.1. 

 

Teaching method

Through cases and discussion of topical issues, the course will give you the opportunity to analyse practical financial situations and problems, on the assumption that you are already familiar with fundamental ideas from previous finance courses, such as CAPM. We will use the case method also to motivate our discussion of the gap between rigorous finance theory and its application to practical problems in corporate finance, and the thought-process required when faced with this gap. I will try to minimize the amount of lecturing along the course and concentrate on the case method to study practical aspects of important topics in corporate finance. 


Evaluation method

The final grade will be based on 40% case study write-ups (in group) and 60% individual final exam.

The case studies will are to be handed in during the term.

Subject matter

We will use the case method also to motivate our discussion of the gap between rigorous finance theory and its application to practical problems in corporate finance, and the thought-process required when faced with this gap. I will try to minimize the amount of lecturing along the course and concentrate on the case method to study practical aspects of important topics in corporate finance. The objective of the course is to teach you how to apply the concepts and techniques learned in the core finance courses to actual real world situations. In addition to analysing the specific financing problems or issues, we will consider how those issues relate to the strategic objectives of the firm. It will be important to examine the big picture assumptions that are used in the numerical calculations. This course also places emphasis on presentation and discussion skills. It will be important to explain your positions to each other and to argue convincingly for your recommendations.