Contents
Corporate Finance studies how corporations finance their operations. The emphasis of this part of the curriculum is on shareholder value and company valuation. We will also study the cost of capital, introduce theories of capital structure, and initial public offerings. The objective of this course is to introduce the fundamental theoretical concepts of company valuation.
Learning outcomes
After completing this course, students will know and understand state-of-the-art tools such as DCF, Residual Income, EVA, and Multiples. In particular, participants will know how to determine the cost of capital for corporations and projects using real world data. Further, participants will learn how to identify value drivers by applying financial ratio analysis. Students will also be familiar with event studies in order to analyse how capital markets react to important corporate events like merger announcements or earnings announcements.
Necessary prerequisites
–
Recommended prerequisites
Every student participating in this course should have completed the equivalent of the 2-semester finance module, which is part of the Mannheim Bachelor program. The lectures generally assume basic knowledge in accounting (balance sheets, income statements, financial ratios), finance (present value methods, portfolio theory, CAPM), mathematics (calculus, optimization) and statistics (mean, variance, standard deviation, univariate and multivariate regressions). The course assumes that students already manage the material in Brealey, Myers, Allen, Corporate Finance, (McGraw-Hill, 10th edition, 2010), chapters 1–19.
Forms of teaching and learning | Contact hours | Independent study time |
---|---|---|
Lecture | 2 SWS | 12 SWS |
ECTS credits | 5 |
Graded | yes |
Workload | 150h |
Language | English |
Form of assessment | Written exam (60 min) |
Restricted admission | no |
Further information | – |
Examiner Performing lecturer | Prof. Ernst Maug, Ph.D. Marc Gabarro, Ph.D. |
Frequency of offering | Fall semester |
Duration of module | 1 semester |
Range of application | M.Sc. MMM, M.Sc. WiPäd, M.Sc. VWL, M.Sc. Wirt. Inf., M.Sc. Wirt. Math., MAKUWI |
Preliminary course work | – |
Literature | Berk, Jonathan and Peter DeMarzo: Corporate Finance, latest edition, Pearson Hiller, Grinblatt, Titman, Financial Markets and Corporate Strategy, 2nd edition, Irwin/ Benninga, Simon, Financial Modeling, 4th edition, MIT Press Weston, Mitchel, Mulherin, Takeovers, Restructuring , and Corporate Governance, 4th edition, Prentice Hall Additional books and articles |
Course outline | Company valuation Generating financial forecasts DCF-approaches Residual income approaches Multiples Measuring the cost of capital Corporate finance and taxes Capital structure policy Event-study methodology Initial public offerings |