Course Details
Course Information Package
Course Unit Title | CORPORATE FINANCE I | ||||||
Course Unit Code | AFIN203 | ||||||
Course Unit Details | |||||||
Number of ECTS credits allocated | 5 | ||||||
Learning Outcomes of the course unit | By the end of the course, the students should be able to:
| ||||||
Mode of Delivery | Face-to-face | ||||||
Prerequisites | AFIN101,AFIN102 | Co-requisites | NONE | ||||
Recommended optional program components | NONE | ||||||
Course Contents | Dividend policy: The dividend process, factors affecting dividend levels and changes, information in dividends and stock repurchases, and the dividend controversy Portfolio theory: Means, variances and correlations of assets based on historical returns or scenarios, portfolio expected returns and volatility, the concept of diversification, feasible investment set, minimum variance set and efficient set, investor preferences in mean-variance space, the capital allocation between risk-free rate and risky portfolios Financing and the cost of capital Miller-Modigliani theory of the capital structure and the tax advantage of debt, the weighted average cost of capital (WACC) approach for firm valuation using CAPM, unlevered and levered betas, capital structure theories Understanding and valuing options: Definitions of common options contracts and their use, payoff diagrams for common option contracts and combinations of options, put-call parity, call and put option contracts using Black-Scholes and binomial trees, sensitivity analysis to option values, application of option theory to corporate investment decisions (real options) | ||||||
Recommended and/or required reading: | |||||||
Textbooks |
| ||||||
References |
| ||||||
Planned learning activities and teaching methods | The taught part course is delivered to the students by means of lecturers, conducted with the help of computer presentations and the use of the board. Lecture notes and other course material like spreadsheet examples are available to students through the web. | ||||||
Assessment methods and criteria |
| ||||||
Language of instruction | English | ||||||
Work placement(s) | NO |