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Course module: USEMTCF
USEMTCF
Topics in Corporate Finance
Course infoSchedule
Course codeUSEMTCF
ECTS Credits5
Category / LevelM (Master)
Course typeCourse
Language of instructionEnglish
Offered byFaculty of Law, Economics and Governance; Graduateschool REBO; International Economics and Business;
Contact personP.J. Engelen
Telephone+31 30 2539943
E-mailP.J.Engelen@uu.nl
Lecturers
Lecturer
P.J. Engelen
Feedback and availability
Other courses by this lecturer
Contactperson for the course
P.J. Engelen
Feedback and availability
Other courses by this lecturer
Teaching period
1  (02/09/2019 to 10/11/2019)
Teaching period in which the course begins
1
Time slotC: MON-afternoon, TUE-afternoon,THU-morning
Study mode
Full-time
RemarkRequired in masters International Management and Financial Management.
Enrolment periodfrom 03/06/2019 up to and including 30/06/2019
Course application processadministratie onderwijsinstituut
Enrolling through OSIRISNo
Enrolment open to students taking subsidiary coursesNo
Pre-enrolmentNo
Waiting listNo
Aims
Learning objectives
At the end of the course the student is able to:
  • analyse capital budgeting decisions for expansion and replacement projects;
  • gain insight into the calculation of the cost of capital;
  • handle complex interactions between investment and financing decisions;
  • reason in real option terms and recognise real options in investment projects;
  • handle options to delay, growth options, options to abandon and other option types;
  • use option models to value real option problems;
  • understand capital structure decisions;
  • solve financing problems by means of near-equity;
  • understand dividend policy decisions.
Content
The course analyses how financial managers (Chief Financial Officers – CFOs) deal with uncertainty in a dynamic business environment. We focus on two areas in which a CFO can add value to a company in handling uncertainty: investment and financial decisions. We analyse how CFOs take investment decisions under uncertainty. In the first part, we analyse how investment projects can be evaluated and selected. We analyse capital budgeting techniques for expansion versus replacement projects. We also analyse how to select investment projects in an inflationary environment. In part two, we zoom in on determining the cost of capital. We analyse differences between cost of capital at the company level, divisional level and project level. We discuss how we can determine the cost of capital of unlisted firms. Part three examines the interaction between investment and financing decisions and added value of the APV-model compared to the standard NPV model. Part four focuses on the new and important concept of real options with respect to capital budgeting decisions. We discuss how to recognise real option characteristics in projects. We analyse options to delay, options to abandon, growth options, sequential options, and switch options. We discuss differences between different sources of risk and how to incorporate them in the analysis. We use different option valuation models to support complex decision-making. Part five onwards zooms in on financing decisions under uncertainty. We first explore how companies decide on their mix of debt and equity. Next, we analyse the use of financial option characteristics in near-equity instruments to match the real option characteristics of projects. Finally, we discuss dividend policy decisions. The course makes intensive use of Harvard Business School case studies.

Format
A combination of lectures and seminars. 

Assessment method
  • Final exam (100% of the final grade)

In case online access is required for this course and you are not in the position to buy the access code, you are advised to contact the course coordinator for an alternative solution. Please note that access codes are not re-usable meaning that codes from second hand books do not work, as well as access codes from books with a different ISBN number. Separate or spare codes are usually not available.
Competencies
-
Entry requirements
You must meet the following requirements
  • Enrolled for a degree programme of faculty Faculty of Law, Economics and Governance
Required materials
Book
Tailor-made e-book from McGraw-Hill and Harvard Business School Coursepack
Study guide
Course manual (on Blackboard)
Handouts
Detailed overviews of study materials and handouts through Blackboard
Instructional formats
Lecture

Seminar

Tests
Final test
Test weight100
Minimum grade1

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