JEM034 - Corporate Finance
|Status:||EEI and EP - elective
ET - elective
F,FM and B - mandatory
Masters - all
MEF - elective
Semester - summer
|Course supervisors:|| prof. Ing. Oldřich Dědek CSc.
|Teachers:|| PhDr. Petra Buzková
prof. Ing. Oldřich Dědek CSc.
PhDr. Jitka Lešanovská
PhDr. Tatjana Vukelic
|Assistants:|| PhDr. Petra Buzková
PhDr. Jitka Lešanovská
|Schedule:||Tutorial: Tuesday 18:30-19:50, room 109.|
|Literature:||The principal text for this course is: Jonathan Berk and Peter DeMarzo: Corporate Finance, Pearson Education, 2007. Students can also use the text-book Brealey, R.A., Myers, S.C.: Principles of Corporate Finance, sixth edition, Irwin McGraw-Hill, 2000.|
|Description:||This course is aimed to provide an understanding of key issues of Corporate Finance. The course offers deeper insight into the theory of capital structure and related topics of dividend policy or financnial distress. It explains the instruments and channels of long-term and short-term financing. Finally, it covers special topics of mergers and acquisitions, basics of capital budgeting and real options.|
|Content:||1. Capital structure in a perfect market: levered and unlevered equity, Modigliani-Miller propositions I and II, homemade leverage, weighted average cost of capital, traditional view on WACC, leveraged recapitalisation, equity dilution.
2. Debt and taxes: tax shield, value of firm with taxes, WACC with taxes, leveraged recapitalisation with taxes, personal taxes, effective tax advantage of debt, imputation system.
3. Financial distress: direct and indirect costs of distress and bankruptcy, limited liability, value of firm with financial distress, agency costs of leverage, over and under investment problem, agency benefits of leverage.
4. Payout policy: types of dividends, dividends days, share repurchase, irrelevance of payout policy, optimal payout policy with taxes, payout versus retention of cash, signalling with payout policy, stock dividend.
5. Equity financing: types of equity, initial public offering, determination of the offer price, seasoned equity offering, rights offer.
6. Debt financing: differences between equity and debt, classification of debt, bond covenants, callable bond, sinking fund, convertible bond, warrant.
7. Leasing: classification of lease transactions, reasons for leasing, leasing versus borrowing and buying, lease-equivalent loan.
8. Short-term financing: net working capital, trade credit, accounts receivable and payable, factoring, bank loans, effective annual rate, inventory management, Baumol model, cash management.
9. Mergers and acquisitions: reasons to acquire, acquisition premium, leveraged buyout, stock-swap transaction, takeover defences.
10. Capital budgeting: incremental free cash flow, weighted-average-cost-of-capital method of valuation, adjusted-present-value method of valuation, flow-to-equity method of valuation, assessing uncertainty.
11. Real options: decision tree analysis, waiting option, growth option, abandonment option.
|Examination dates:||Written test:
May 7, 2013 18:30 room 109
May 14, 2013 18:30 room 109
May 21, 2013 18:30 room 109
|Course requirements:||Written test
Final oral examination
|Downloadable:||01 Corporate Finance I.pdf
02 Corporate Finance II.pdf
03 Corporate Finance III.pdf