Advanced Corporate Finance
Elective ModulesIn this module you will extend the valuation of firm assets and liabilities to cases where they contain embedded contingent claims (options), reconciling these option prices of assets and liabilities with the Capital Asset Pricing Model (CAPM). You will also discuss the role and activity of hedge funds since, as investment 'corporations', they often make intensive use of options.
After reviewing the traditional, static, corporate finance paradigms and clarifying the necessary Black Scholes and Merton technology, you will go on to explore the implications for dynamic corporate asset and liability management when optionality is present.
You will examine the valuation of warrants and convertibles and optimal capital structure management with costly bankruptcy. You will discuss mergers and acquisitions in this framework and study examples where the Modigliani Miller value additivity principle does not hold. Finally, you will evaluate the valuation of the embedded options in physical (not financial) asset ownership.
By the end of this module you will have:
- Determine expected returns on holding options
- Valued firm components using simple option sharing rules
- Discussed the determinants of a firm's cost of capital and capital structure
- Explored firm restructuring and the relevance of agency theory
- Understood why traditional NPV rules are deficient and evaluated simple real options examples.
There are other elective modules available in this field.
| European Taxation |
| Corporate Finance |
| Financial Analysis |
| Management Accounting |
| Mergers & Acquisitions |
