Corporate Financial Strategy
- Spring 20
Corporate Financial Strategy --- This course focuses on financing, investment, and risk management decisions of corporations in creating shareholder value. The course starts with analyzing the mixture of debt versus equity decision in detail considering the impact of taxes, agency problems, and asymmetric information. It analyzes the different types of debt and equity instruments such as callable and convertible debt. We study the different
methods of raising external capital and payout policies such as dividends and share repurchases. We also analyze corporate acquisitions, and how to create value using takeovers. The course also examines the interaction between financing and investment decisions and operating firms under financial distress.
Finally, we examine the role of options and flexibility of corporate investment decisions as well as risk management perspective. Taking creation or loss of flexibility into account, we develop the enhanced NPV rule for the corporate investment decisions. We use options as well as futures contracts to manage and control risk.