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Corporate Finance (DLMINRE01)

Course No.:

DLMINRE01

Course Title:

Corporate Finance

Hours Total:

150 h

Credit Points:

5 ECTS

Course Type: Pflicht, Wahlpflicht

Zu Details beachte bitte das Curriculum des jeweiligen Studiengangs

Course Availability: WS, SS

Course Duration: 1 Semester

Admission Requirements:

None

Course Coordinator / Instructor:

See current list of tutors in the Learning Management System

References to Other Modules:

Please see module description

Course Description:

How is funding provided to a corporate activity? How much loan capital and/or own capital does one need? Which projects are worth investing in? What is the actual value of a company? What instruments are available to measure the value of a company and assess financial markets? How can one ensure an optimal balance between the competing goals of liquidity, safety, yield, and growth?

This course offers answers to these and other complex questions on the topic of financing and investing. The introduction deals with portfolio selection and capital market theory. With this theoretical foundation, various financing types and capital structures are then explained in detail. Well-known corporate assessment procedures, such as the discounted cash flow method, are presented, as are different calculations that can be used to inform decision making. A critical element of the course is the topic of mergers and acquisitions. Case studies are included to illustrate which parties are typically involved in a merger or acquisition and what criteria is used to determine the success of such a venture. The course concludes with the topic of finance planning.

 

Course Objectives and Outcome:

Upon completion of this course, students will be able to:

  • know the key components of corporate finance.
  • use financial mathematical methods.
  • apply the previously learned methods by using selected data sets and case studies.
  • understand the capital structures of a corporation as well as their need to make investment and funding decisions.
  • apply the common methods of business valuation and understand the basics of mergers & acquisitions.

Teaching Methods:

The learning materials include printed and online course books, vodcasts, online knowledge tests, podcasts, online tutorials, and case studies. This range of learning materials is offered to students so they can study at a time, place, and pace that best suits their circumstances and individual learning style.

Course Content:

1 Portfolio and Capital Market Theory

1.1 Capital Markets and Information Efficiency

1.2 Portfolio Theory

1.3 CAPM

2 Stock and Portfolio Analysis

2.1 Measures of Risk and Performance

2.2 Stock Analysis

3 Optimal Capital Structure

3.1 Capital Structure Based on Traditional Theorem

3.2 Capital Structure According to Modigliani/Miller

3.3 Neo-Institutional Capital Structure Model

4 Types of Financing

4.1 Internal and External Financing

4.2 Debt Financing

4.3 Equity Financing

4.4 Additional Financing Options

5 Capital Budgeting

5.5 Fundamental Concepts

5.2 Static Capital Budgeting Methods

5.3 Dynamic Investment Calculation Methods

6 Business Valuation

6.1 Purpose and Methods of Business Valuation

6.2 Individual Valuation Methods

6.3 Total Valuation Methods

6.4 Weighted Average Cost of Capital (WACC)

7 Corporate Control and M&A

7.1 The Market for Corporate Control: Mergers and Acquisitions

7.2 Motivations for M&A Transactions

7.3 Phases of M&A Transactions

8 Specific Forms of M&A, Private Equity, Due Diligence, and IPOs

8.1 Due Diligence

8.2 Friendly and Hostile Takeovers, LBOs, MBOs, and MBIs, and IPOs

8.3 Private Equity and Venture Capital Companies

9 Corporate Governance

9.1 Internal and External Corporate Governance

9.2 Example of Legal Basis: Sarbanes Oxley Act (SOX)

9.3 Effect on the Company Performance and the Significance of Ownership Structures

9.4 Additional Financing Options

10 Financial Planning

10.1 Principles of Financial Planning

10.2 Cash Budgeting

10.3 Projected Financial Statements and Ratios

Literature:

• Brealey, R. A., & Myers, S. C. (2013). Principles of corporate finance (11th ed.). New York, NY: McGraw-Hill.
• Brealey, R. A., Myers, S. C., & Marcus, A. J. (2011). Fundamentals of corporate finance (7th ed.). New York, NY: McGraw-Hill.
• Brigham, E. F., & Daves, P. R. (2013). Intermediate financial management (11th ed.). Boston, MA: Cengage.
• Copeland, T. E., Weston, J. F., & Shastri, K. (2013). Financial theory and corporate policy (4th ed.). Essex: Pearson.
• Damodaran, A. (2010). Applied corporate finance (3rd ed.). Hoboken, NJ: Wiley & Sons.
• Damodaran, A. (2001). Corporate finance: Theory and practice (2nd ed.). Hoboken, NJ: Wiley & Sons.
• Megginson, W. L., Smart, S. B., & Gitman, L. J. (2010). Corporate finance: Linking theory to what companies do (3rd ed.). Boston, MA: Cengage.
• Ross, S. A., Westerfield, R. W., & Jaffe, J. (2011). Corporate finance, core principles and applications (6th ed.). New York, NY: McGraw-Hill.
• Weston, F. J., Mitchell, M., & Mulherin, H. (2014). Takeovers, restructuring, and corporate governance (4th ed.). Essex: Pearson.
• Ernst, D., & Häcker, J. (2011). Applied international corporate finance (2nd ed.). Munich: Vahlen.
• Schmeisser, W. (2010). Corporate finance and risk management. Munich: Oldenbourg.

Prerequisites to Qualify for Assessment:

• Depending on the course: Completion of online knowledge tests (approx. 15 minutes per unit, pass / not pass)
• Course evaluation

Assessment:

Exam, 90 min

Student Workload (in hours): 150

Self-study: 90
Self-testing: 30
Tutorials: 30