Corporate Finance

01

Introduction

In this lecture, you will know the characteristics of a corporation and how to understand its advantages comparing with other types of firm. You will also know three questions the corporate finance mainly discussed about and why the maximization of shareholder's value is generally regarded as the goal of a corporation.

課時

1.1. What is the Corporate Finance?

1.2. What is the goal of a corporation?

02

Introduction of Investment Decisions

In this lecture, you will understand the law of one price and how arbitrages force the law hold. You can also apply the law to price bonds and stocks. Typically, you will have the knowledge about Present Value (PV) and Future Value (FV) , and use them to solve Time Value of Money (TVM) problems.

課時

2.1. Time Value of Money

2.1.1 Simple Interests versus Compound Interests

2.1.2 Basic Time Value of Money

2.1.3 Advanced Time Value of Money

2.1.4 Using Spreadsheet

2.1.5 Using Financial Calculator

2.2. The Application of Time Value of Money

2.2.1 The Law of One Price

2.2.2 Bond Pricing

2.2.3 Stock Pricing

2.2.4 Using Spreadsheet

2.2.5 Using Financial Calculator

03

Methods of Investment Decisions

In this lecture , you will know how to choose projects using some investment criteria such as Net Present Value (NPV), Internal Rate of Return (IRR), Payback Period and Profitability Index. You will also know how to use IRR rules correctly and choose projects with unequal life spans.

課時

3.1. Investment Critiria

3.1.1 Net Present Value (NPV)

3.1.2 Internal Rate of Return (IRR)

3.1.3 Other Methods

3.1.4 Using Spreadsheet

3.1.5 Using Financial Calculator

3.2. Some Special Cases

3.2.1 Projects with Unequal Life Spans

3.2.2 Using Spreadsheet

3.2.3 Loan Amortization

04

Applications of Investment Decisions

Until now, the models we talked about is called discounted cash flow models. In this lecture ,we will discuss about how to estimate the free cash flows and the discount rate respectively. You will understand the principles to estimate the free cash flow and the CAPM model to estimate the cost of capital.

課時

4.1. Identifying and Estimating a Project's Cash Flows

4.1.1 Cash Flow Estimation Principles

4.1.2 Identifying a Project's Relevant Cash Flows

4.1.3 Estimating Free Cash Flows

4.2. Estimating the Cost of Capital

05

Theory of Financing Decisions I

This lecture is the first part of capital structure theories. We will talk about the MM theorem in perfect market. You will understand the economic intuition behind the theorem and see how taxes affect firm's capital structure decisions.

課時

5.1. The Introduction of Capital Structure Problems

5.2. Modigliani-Miller Theorem Without Taxes

5.3. Modigliani-Miller Theorem With Taxes

06

Theory of Financing Decisions II

This lecture is the second part of capital structure theories. In this part, we will relax the assumption of perfect market and focus on how financial distress, agency problems and information asymmetries affect firm's capital structure decisions.

課時

6.1. Financial Distress and the Trade-off Theory

6.2. Agency Problems and the Trade-off Theory

6.3. Information Asymmetry and the Pecking Order Theory

07

Capital Budgeting and Valuation with Leverage

In this lecture, we will talk about the impact of leverages on capital budgeting and valuation. We will talk about three models such as WACC, APV and FTE and we will further talk about the relationships and differences among them.

課時

7.1. The Weighted Average Cost of Capital Method (WACC)

7.2. The Adjusted Present Value Method (APV)

7.3. The Flow-to-Equity Method (FTE)

7.4. Summary

08

Allocation Decisions

This lecture mainly talks about payout policies under the perfect and imperfect market respectively. We will see how a firm allocates its earnings and how this behavior affect the value of the firm.

課時

8.1. Allocation Decisions in a Perfect Market

8.2. Allocation Decisions in an Imperfect Market ^[1] 

1. Corporate Finance: the Core, Johnathan Berk and Peter DeMarzo and , 4th Edition, Pearson Publication

2. Fundamentals of Corporate Finance, Stephen Ross, 11th Edition, McGraw-Hill Education

3. Finance for Executives: Managing for Value Creation, Gabriel Hawawini and Claude Viallet, 5th Edition, Cengage Learning ^[1]