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Corporate Finance

Module WI000091

This Module is offered by Chair of Financial Management and Capital Markets (Prof. Kaserer).

This module handbook serves to describe contents, learning outcome, methods and examination type as well as linking to current dates for courses and module examination in the respective sections.

Module version of SS 2015

There are historic module descriptions of this module. A module description is valid until replaced by a newer one.

available module versions
WS 2018/9SS 2015WS 2011/2

Basic Information

WI000091 is a semester module in English language at Bachelor’s level and Master’s level which is offered in summer semester.

This Module is included in the following catalogues within the study programs in physics.

  • Catalogue of soft-skill courses
Total workloadContact hoursCredits (ECTS)
180 h 60 h 6 CP

Content, Learning Outcome and Preconditions

Content

The module covers fundamental concepts in corporate finance. This knowledge is important as a fundament for advanced courses in corporate finance as well as a career in the investment banking or in a corporate treasury department.

• Options: Basic understanding, put call parity, binomial and Black-Scholes option pricing, equity as call option
• Real options: Identification and binomial pricing
• Valuation: Introduction to DCF methods, multiples methods and applications
• IPO: Empirical studies of IPO costs, IPO process
• Capital structure: WACC under OPM, CAPM and MM, trade off theory of debt, agency theory of debt, pecking order theory of debt
• Efficient markets: Definitions, modeling, empirical approaches and results
• M&A: Explanations of wealth effects of M&A, explanations for conglomerates, Empirical results on
other forms of ownership decreases and change (divestitures, carve outs, spin offs, tracking stock,
split ups, LBOs)
• Dividend policy: Theories of optimal dividend policy, Empirical evidence

Learning Outcome

After successful completion of the module, students will be able to explain the most common concepts in corporate finance such as real and financial options, company valuation, market efficiency and dividend and leverage policies. Furthermore, they are able to discuss critically these topics. Finally, they will be able to apply the above concepts and decide on corporate financial policies as well as evaluate financial and real options and companies (e.g., by using option theory or DCF methods).

Preconditions

The student should have a solid understanding of finance fundamentals (discounting cash flows, risk, CAPM). These topics are covered in the course “Investitions- und Finanzmanagement” or in other introductory finance classes.

Courses, Learning and Teaching Methods and Literature

Courses and Schedule

TypeSWSTitleLecturer(s)Dates
VO 2 Corporate Finance (WI000091) Kaserer, C.
Assistants: Bias, D.
Tue, 13:15–14:45, 0606
UE 2 Corporate Finance - Exercise (WI000091) Bias, D. Tue, 15:00–16:30, 0606

Learning and Teaching Methods

There is a weekly lecture and tutorial. During the lecture, the content is presented with the help of slides and computations on a tablet computer. Students can gain a deeper understanding by solving the weekly problem sets. The solution to these problem sets is presented each week during the tutorial.

Media

Presentation slides and white board.

Literature

Required:
• Berk, DeMarzo (2014, 3/E): Corporate Finance
• Copeland, T. E./ Weston, J. F./ Shastri, K. (2005): Financial Theory and Corporate Policy, USA, Addison Wesley, 4th International Edition.

Further recommended readings will be given in the lecture.

Module Exam

Description of exams and course work

At the end of the course, there will be a written, closed book, multiple choice, final exam which will take 120 minutes. This exam consists of theoretical questions regarding corporate finance (e.g. characteristics of real options, when to apply which company valuation method, theoretical considerations on the optimal capital structure) as well as performing applied computations (e.g. valuing real options, computing equity values by discounting cash flows, adjusting firm risk measures for leverage) . The theoretical questions are mainly based on the lecture whereas the calculations are mainly based on the tutorial.

Furthermore, students have the option to write a one-hour, closed book, multiple choice midterm exam. With this exam students can improve their final grade by one fraction (0,2/0,3). The exam covers the material from the first half of the term, students show that they are able to explain and evaluate the most common concepts in corporate finance. By completing calculations students demonstrate that they are able to apply these concepts.

Exam Repetition

There is a possibility to take the exam in the following semester.

Current exam dates

Currently TUMonline lists the following exam dates. In addition to the general information above please refer to the current information given during the course.

Title
TimeLocationInfoRegistration
Corporate Finance
Thu, 2020-02-20, 15:30 till 17:30 1200
till 2020-01-15 (cancelation of registration till 2020-02-13)
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