Financial Derivatives in Corporate Finance: Managing Risk and Creating Value

Course Code
FIN 580
2.25 hours
  • Fall 21 (A)
  • Fall 22 (A)
  • Winter 21 (A)
  • Winter 22 (A)
Graduate Standing

Financial Derivatives in Corporate Finance: Managing Risk and Creating Value --- Financial derivatives play several important role in corporate finance: They can be used to hedge risks, they are the building blocks for analysis of corporate credit risk, and they serve as analytical tools to value corporate investment projects that have built-in flexibility, e.g., due to a multi-stage structure or timing options. In this course, we introduce the core principles that underlie the valuation and use of derivatives such as futures, swaps, options, and credit derivatives. We apply these ideas to a number of problems including hedging of interest-rate, foreign exchange, and commodity price risk, real options in investment decisions, and transfer of credit risk. With a focus on corporate value creation, we pay particular attention to potential misuses of derivatives and unintended consequences of corporate financial engineering in the face of financial market imperfections.

Taught By
Jason Hall
  • Lecturer I in Business
Jason's research into equity valuation and the cost of capital has led to 15 publications and been relied upon by corporations listed on the...
Nejat Seyhun
  • Jerome B. and Eileen M. York Professor of Business Administration
  • Professor of Finance
Nejat’s research activity focuses on backdating of executive options, risk-return trade-off in asset prices, intra-day impact of insider trading,...