Objectifs

The aim of this course is to provide students with a thorough understanding of how corporate financial decisions are made in the presence of economic uncertainty.

In this course we will study the sources of corporate financing and the evaluation of alternative investment projects. This process will involve understanding principles of capital budgeting, measuring and projecting cash flows and computing the firm’s cost of capital. We will examine how taxation and bankruptcy costs affect corporate financing, and how ultimately those decisions shape the cost of firm financing. We will go through a variety of methods for valuing projects, equities or firms.

We will study how investment and financing decisions are distorted when conflicts of interest emerge between creditors and shareholders, or management and shareholders. We will see why valuable projects may not be undertaken, how debt financing may give rise to value destroying investments and excessive risk taking. Furthermore, we will see why firms may be cut off from financing (credit rationing), and how firms can navigate corporate bankruptcy. Finally, we will examine the challenges firms are facing in the contemporary world, as they are planning ahead to face the dangers and opportunities of climate change.

Contenus

1. Introduction to Finance

2. Financial Statement Analysis

3. Time value of money

4. Capital Budgeting I

5. Student Presentations

6. Capital Budgeting II

7. Capital Budgeting III

8. Risk in investment projects

9. Valuation I

10. Valuation II

11. Bankruptcy and the Trade-off Theory of Capital Structure

12. The Green transition

13. Agency costs

14. Asymmetric Information

Références

Evaluation

1ère tentative

Examen:

Ecrit 3h00 heures

Documentation:

Autorisée

Calculatrice:

Autorisée avec restrictions

Evaluation:

• Final exam format: written, 3 hours.
• The final grade for the course is:

Grade=0.2*Project Grade Average +0.8*Final Exam Grade.

The Project and the Final Exam are each graded on a 1-6 scale. A grade 0 will be assigned for late submissions/omissions/copying or any other breach of academic integrity.

Retake exam: Same as first attempt.

Rattrapage

Examen:

Ecrit 3h00 heures

Documentation:

Autorisée

Calculatrice:

Autorisée avec restrictions

Evaluation:

Retake exam: Same as first attempt.