Corporate Financing Course

Lesson 1 • Risk and Return Fundamentals

Explains the risk-return trade-off and statistical measures of risk. Prepares students to evaluate investment opportunities using expected return metrics.

Lesson 2 • Reading Financial Statements

Covers income statement, balance sheet, and cash flow statement structure. Connects accounting outputs to financing and investment decisions.

Lesson 3 • Time Value of Money

Introduces present and future value mechanics as the foundation for all valuation work. Enables discounting of cash flows across any time horizon.

Lesson 4 • Financial Ratio Analysis

Applies ratio categories to assess liquidity, leverage, efficiency, and profitability. Provides diagnostic tools used in financing decisions and lender assessments.

Lesson 1 • Identifying Relevant Cash Flows

Distinguishes incremental from sunk and allocated costs in project analysis. Correct cash flow identification is the prerequisite for all valuation methods.

Lesson 2 • Net Present Value Method

Derives NPV as the primary decision rule for capital allocation. Demonstrates why positive NPV projects increase firm value.

Lesson 3 • Capital Rationing and Project Selection

Addresses constrained budget scenarios requiring portfolio-level project ranking. Applies profitability index and integer programming concepts.

Lesson 4 • Risk Analysis in Capital Budgeting

Integrates sensitivity, scenario, and simulation analysis into project evaluation. Equips analysts to quantify and communicate project risk to decision-makers.

Lesson 1 • Adjusting Cost of Capital for Risk

Applies pure-play and subjective risk adjustments to project-specific discount rates. Prevents systematic over- or under-investment in high- and low-risk divisions.

Lesson 2 • Cost of Debt and Preferred Stock

Calculates pre-tax and after-tax cost of debt using yield-to-maturity and credit spreads. Extends the framework to hybrid instruments like preferred stock.

Lesson 3 • Weighted Average Cost of Capital

Combines component costs using market-value weights to derive WACC. Demonstrates WACC's role as the firm-level hurdle rate for investment decisions.

Lesson 1 • Practical Capital Structure Decisions

Translates theory into actionable guidance for setting and adjusting leverage. Covers credit rating targets, covenant constraints, and peer benchmarking.

Lesson 2 • Leverage Effects on Firm Value

Quantifies how changing leverage alters EPS, ROE, and firm value under different scenarios. Prepares students to model capital structure changes for management presentations.

Lesson 3 • Trade-Off Theory of Capital Structure

Balances tax shield benefits against financial distress costs to identify an optimal leverage ratio. Explains observed cross-industry differences in debt usage.

Lesson 4 • Pecking Order and Market Timing Theories

Presents information asymmetry-based explanations for financing choices. Contrasts pecking order predictions with trade-off theory outcomes.

Lesson 1 • Corporate Bond Fundamentals

Covers bond features, pricing, yield measures, and duration. Links bond valuation to the cost of debt concepts introduced in Chapter 3.

Lesson 2 • Convertible and Hybrid Instruments

Examines convertible bonds, warrants, and hybrid securities that blend debt and equity features. Explains issuer motivations and investor valuation approaches.

Lesson 3 • High-Yield and Leveraged Debt

Analyzes below-investment-grade debt structures used in leveraged buyouts and growth financing. Covers covenant-lite trends and second-lien instruments.

Lesson 4 • Debt Issuance Process

Walks through the end-to-end process of bringing a bond or loan to market. Covers documentation, roadshows, bookbuilding, and pricing decisions.

Lesson 1 • Seasoned Equity Offerings

Covers follow-on offerings, rights issues, and accelerated bookbuilds as post-IPO equity raising tools. Analyzes announcement effects on existing shareholders.

Lesson 2 • Equity Market Valuation Signals

Interprets market-based signals such as P/E, EV/EBITDA, and price-to-book for equity issuance timing. Connects market conditions to financing window decisions.

Lesson 3 • Private Equity and Venture Capital

Examines pre-IPO equity financing stages from seed through growth equity. Covers term sheet economics, valuation methods, and exit pathways.

Lesson 4 • Equity Instruments and Rights

Distinguishes common stock, preferred stock, and equity-linked instruments by cash flow and control rights. Establishes the equity layer of the capital structure.

Lesson 1 • Discounted Cash Flow Valuation

Constructs a free cash flow forecast and terminal value to derive enterprise value. Integrates WACC from Chapter 3 as the discount rate.

Lesson 2 • Comparable Company Analysis

Selects peer groups and applies trading multiples to derive an implied valuation range. Teaches normalization of financials for meaningful peer comparison.

Lesson 3 • Precedent Transaction Analysis

Uses acquisition multiples from comparable deals to estimate control premiums and transaction value. Distinguishes strategic from financial buyer pricing.

Lesson 4 • Leveraged Buyout Valuation

Models an LBO to determine the maximum price a financial sponsor can pay at a target return. Introduces debt capacity and returns analysis as valuation inputs.

Lesson 1 • Dividend Policy and Share Buybacks

Evaluates dividend irrelevance theory against signaling and clientele effects in practice. Compares dividends and buybacks as mechanisms for returning capital to shareholders.

Lesson 2 • Working Capital and Liquidity Management

Links operating cycle management to short-term financing needs and cash flow optimization. Covers cash conversion cycle, credit lines, and commercial paper.

Lesson 3 • Mergers and Acquisitions Financing

Analyzes cash, stock, and mixed consideration structures and their impact on acquirer value. Covers accretion-dilution analysis as the primary M&A financing decision tool.

Lesson 4 • Financial Restructuring Strategies

Covers debt restructuring, distressed exchanges, and balance sheet recapitalization options. Prepares students to advise firms facing liquidity stress or over-leverage.