Corporate Finance and Behaviour

Course goals

Academic skills
This course focuses on the following analytical skills:

• Being able to solve problems (identifying the problem, devising a path towards the solution, follow this path, verify the outcome) for more complex assignments.       
• Being able to identify, interpret and critically evaluate the main line of reasoning, for more complex problems.
• Being able to evaluate evidence in text and presentations for more complex problems.

Content

This course focuses on the fundamental financial theories and applications that explain how investors, managers, corporations and other market participants interact and behave in the financial markets and what affects and drives their decisions, as well as the implication of those decisions and interactions. It also considers how corporate financial managers make financing decisions, and manage financial risks. The course covers several major aspects of financial analysis and decision making that are important to modern corporations, including the valuation of projects and securities, capital structure choice, working capital management, and the management of international risks. While many of the theories and tools in financial management assume well-functioning capital markets with rational economic agents, the course also covers alternative perspectives based on key insights from the field of Behavioral Finance.

Topics:

• Companies and corporate governance
• Financial information and financial statements
• Time value of money, discounted cash flows and financial arithmetic
• Risk and return, portfolio theory, SML and CAPM
• Cost of capital and capital structure
• Working capital management
• Risk management and Option Theory
• Behavioural Finance

Format
There will be plenary lectures, tutorials and online quizzes.

Assessment method
The final course grade will be the based on two marks: 1) the mid-term exam (40%) and 2) the Final Exam mark (60%).

Effort requirements
The effort requirement for this course is attendance and active participation in the tutorials. To be eligible for the retake you need to attend at least 5 out of 7 tutorials for which you’re demonstrably prepared.

Repeaters
Repeaters will have the same curriculum, responsibilities and treatment as a regular student. This includes the weekly quizzes and the need to attend the weekly tutorial sessions in order to meet the minimum effort  requirement.

In case online access is required for this course and you are not in the position to buy the access code, you are advised to contact the course coordinator for an alternative solution. Please note that access codes are not re-usable meaning that codes from second hand books do not work, as well as access codes from books with a different ISBN number. Separate or spare codes are usually not available.