Level

Master, compulsory module in specialization "AFT", 6 ECTS

Course outline

The course covers key concepts of modern corporate finance in theory and practice. In particular, we focus on how investment and financing decisions affect the value of the firm. Among the topics discussed are:

• Financial statement analysis and valuation
• Cost of debt and equity capital
• Business valuation models based on dividends, cash flows, and (abnormal) earnings
• Advanced valuation issues

The course is tailored to master's students who already attended an introductory course in (corporate) finance and/or investments at the B.A. level, and have solid knowledge in microeconomics and statistics/econometrics, as well as good working knowledge of a spreadsheet program, such as Microsoft Excel. Please note that the course involves constructing own financial models that build on the concepts discussed in class quickly, so you should try to keep up by reading the assigned literature in due time.

Recommended readings

• Benninga: Financial Modeling, 4th edition, Cambridge (Mass.) 2014
• Hillier / Ross / Westerfield / Jaffe / Jordan: Corporate Finance, 4th European edition, 2020
• Penman: Financial Statement Analysis and Security Valuation, 5th edition, Boston (Mass.) 2013
• Titman / Martin: Valuation, 3rd edition, Boston (Mass.) 2016
• Further readings may be announced during the course.

Optional readings

• Copeland / Weston / Shastri: Financial Theory and Corporate Policy, 4th edition, Boston (Mass.) 2005
• Damodaran: Applied Corporate Finance, 3rd edition, Hoboken (NJ) 2010
• Damodaran: Damodaran on Valuation, 2nd edition, Hoboken (NJ) 2006
• Koller / Goedhart / Wessels: Valuation, 5th edition, Hoboken (NJ) 2010