MFIN.5500 Corporate Finance
Corporate finance focuses on the financial decision making process that is designed to maximize shareholder wealth. It provides a framework for making a wide variety of decisions, such as choosing the optimal combination of debt and equity to finance a corporation's operations, identifying the most profitable projects to pursue, determining the most appropriate distribution of dividends to stockholders. The course introduces the concept of the time value of money, and examines techniques applicable to the pricing of fixed-income assets and capital budgeting, assessing the respective advantages and disadvantages of each approach. The statistical properties of risk and return for financial assets, modern portfolio theory, the Capital Asset Pricing Model (CAPM), and several equity pricing models, such as the dividend discount model and the Gordon growth model are analyzed. Financial statements analysis, techniques for determining the optimal capital structure of a corporation including an analysis of the Miller-Modigliani Theorem, and an overview of dividend policies are also covered.