Corporate Finance

• Basic financial concepts such as: present value, the opportunity cost of capital, investment decisions, risk and return and market efficiency.
• The impact of corporate financing, including payout policy, on investment decisions and firm value.
• Agency conflicts between shareholders, managers and debtholders.
• Executive compensation and other systems designed to reduce the extent of agency conflicts.
• Information asymmetries between managers and shareholders, and their impact on corporate financing and investment policies.
• Raising capital
• The implications of behavioural finance for corporate behaviour.
• Market efficiency and event study methodology
• Valuation of stocks
• Rationales for and implications of merger and acquisition activity

A candidate who has completed his or her qualification should have the following learning outcomes defined in terms of knowledge, skills and general competence:

Knowledge

The candidate...

• can explain basic financial concepts such as: present value, the opportunity cost of capital, investment decisions, risk and return and market efficiency.
• understands the impact of corporate financing on investment decisions and firm value.
• can explain option theory and valuation.
• understands the functioning of bond markets and the valuation of bonds.
• understands theories and evidence on executive compensation.
• understands information asymmetries between managers and shareholders and their impact on corporate financing and investment policies.
• understands the implications of behavioral finance for corporate behavior.
• can explain rationales for and implications of merger and acquisition.

Skills

The candidate...

• can apply real options theory to investment decisions.
• can identify agency conflicts between shareholders, managers and debtholders.
• can explain corporate governance systems designed to reduce the extent of these agency conflicts.