This course builds on Principles of Finance and examines important issues in corporate finance from the perspective of financial managers who are responsible for making significant financing and investment decisions. You will learn how investment and financing decisions interact to affect the value of the firm and how management can evaluate operating decisions, taking into account taxes and uncertainty.

There are two building blocks: In part 1, you will learn important foundations of valuation and capital structure. In part 2, we investigate the effects of financial distress, managerial incentives, and information. Throughout the course we apply the learned theory on real world problems.

After completing this course the student will have the ability to:

• Understand the most important determinants of a firm's financial structure;
• Understand how the market value of a firm will be affected by financial decisions;
• Incorporate the effects of time, uncertainty, taxes, and incentives on the present value of firm cash flows;
• Analyze complex cases with a view on identifying the overall effect on shareholder value.

Moreover, the course contributes to students' ability to:

• demonstrate effective team skills in order to contribute appropriately to the production of a group output.
• work and communicate effectively alone and in a team situation and to function as a valuable and cooperative team member.
• structure complex problems.

Compulsory attendance will be monitored through presentations of varying student teams, in-class tests and active class participation.

The material in part 1 und 2 builds on Principles of Finance and selected chapters from Corporate Finance by Berk and DeMarzo. Please make sure that you brush up on the material you covered in Principles of Finance and read the relevant chapters in Berk and DeMarzo before class. In the first two classes we will summarize the knowledge needed from the Principles of Finance by rushing through the chapters 1 to 13 from Corporate Finance by Berk and DeMarzo.

An important part of the course is to apply what you learned. I will form teams in which you analyze a company of your choice and discuss some of the most influential papers in (corporate) finance (more in class).

Class participation is mandatory and important. I may call on individuals to lead a discussion or otherwise participate in the discussion.

Grades will be based on:

• Final (40 Points)
• Case study = analyzing a company (20 Points)
• In-Class Tests (20 Points)
• Class participation = discussion of influential papers (20 Points)

stefan.bogner@wu.ac.at

Meeting by appointment via email.