This module introduces students to important corporate finance topics. The course will explore several questions including: How do firms choose between different sources of funding: equity and debt financing? Is there an optimal combination of equity and debt financing? How do firms select the projects to invest in? How do investors value a firm? Why do firms get involved in mergers and acquisitions (M&A)?
The course provides a detailed understanding of the key stages of the lifecycle of a firm. It starts by analysing the ways firms raise capital, e.g., initial public offering and bond issuance. It then discusses the various trade-offs associated with equity and debt financing and the optimal capital structure. Next, the course focuses on capital budgeting, namely the decision-making process associated with capital investment. Furthermore, the course sheds light on the valuations of firms and highlights the implications for mergers and acquisitions. Throughout the module, students will be exposed to prominent theories in corporate finance, the empirical evidence, as well as examples from the business world. While the lectures introduce the key concepts, the seminar provide students with the opportunity to discuss case studies and to confront the theories with real data from the finance industry. The assessment is conducted via a practical group project that consists in preparing an M&A pitchbook (40%) and an individual exam (60%). Overall, the students will develop a range of skills, including their commercial awareness, problem-solving, and communication skills.