This module looks at the basics and the main challenges of corporate finance, with a central focus on decisions of stock corporations regarding investing and financing under certainty and under uncertainty.
The first part of the module deals with and compares the two most important and most commonly used method of evaluating investments. The second part deals with the question of the costs of equity financing, and asks whether there is such a thing as an optimal capital structure. Part Three, building on the theory of Portfolio Selection will look at the evaluation of various uncertain investments in the framework of the so-called Capital Asset Pricing Mode.
Finally, the module teaches the basic concepts of Finance Theory in a world where those involved in any financial relationship have access to dif- ferent levels of information.
Upon completion of the module, the students will have acquired knowledge of the characteristics of fundamental financial products. The students will learn to understand and execute the Capital Asset Pricing Mode. They will thus know how to categorize and analyze various financial products as well as investment and financing projects, both under certainty and under uncertainty, and to evaluate them and to gauge financing risks.
To re-fresh your knowledge in mathematics and statistics, participation of the module "Basics of Financial Mathematics" is highly recommended.
Prof. Dr. Reinhard H. Schmidt