Advanced Corporate Finance Course

Lesson 1 • Financial Statement Analysis for Finance

Extracts decision-relevant data from income statements, balance sheets, and cash flow statements. Bridges accounting outputs to financial modeling inputs.

Lesson 2 • Risk and Return Fundamentals

Defines systematic and unsystematic risk and their pricing implications. Provides the conceptual base for cost-of-capital estimation in later chapters.

Lesson 3 • Time Value of Money Review

Reinforces present and future value mechanics as the mathematical backbone of all valuation. Ensures fluency before advanced discounting techniques are introduced.

Lesson 1 • Cost of Equity Models

Estimates equity return requirements using CAPM, the dividend growth model, and multifactor approaches. Highlights assumptions and limitations of each method.

Lesson 2 • Weighted Average Cost of Capital

Combines component costs using market-value weights to derive WACC. Addresses circular reference issues and iterative solutions in financial models.

Lesson 3 • Adjusting Discount Rates for Risk

Modifies WACC for divisions or projects with risk profiles different from the firm average. Introduces pure-play beta and certainty-equivalent approaches.

Lesson 1 • Capital Rationing and Project Selection

Allocates a constrained capital budget across competing projects to maximize total NPV. Introduces integer programming concepts for portfolio optimization.

Lesson 2 • Core Capital Budgeting Criteria

Applies NPV, IRR, MIRR, and payback methods to investment decisions. Explains why NPV is theoretically superior and when alternatives are useful.

Lesson 3 • Real Options in Capital Budgeting

Extends NPV by valuing managerial flexibility embedded in investment decisions. Demonstrates how options to expand, defer, or abandon affect project value.

Lesson 4 • Sensitivity and Scenario Analysis

Tests project robustness by varying key assumptions individually and in combination. Builds judgment about which variables most threaten project viability.

Lesson 1 • Pecking Order and Market Timing

Presents information-asymmetry-based theories that explain observed financing sequences. Contrasts with trade-off theory to show why firms deviate from optimal leverage.

Lesson 2 • Modigliani-Miller Propositions

Establishes the irrelevance baseline and then introduces taxes and distress costs to explain real-world leverage choices. Builds theoretical intuition before practical application.

Lesson 3 • Leverage and Financial Flexibility

Quantifies the value of maintaining unused debt capacity for future opportunities. Addresses how flexibility affects investment and competitive strategy.

Lesson 4 • Agency Costs and Debt Covenants

Examines how debt disciplines managers and how covenants mitigate bondholder-shareholder conflicts. Links agency theory to observed debt contract features.

Lesson 1 • Valuation Synthesis and Judgment

Combines outputs from multiple methods into a football field chart and a defensible value range. Develops professional judgment about weighting competing estimates.

Lesson 2 • Adjusted Present Value Method

Separates unlevered firm value from financing side effects to value leveraged transactions. Particularly useful when capital structure changes significantly over time.

Lesson 3 • Discounted Cash Flow Valuation

Builds a full DCF model from projected free cash flows and terminal value. Emphasizes forecast assumptions, growth rates, and sensitivity to discount rate changes.

Lesson 4 • Comparable Company Analysis

Derives implied valuation ranges using trading multiples from peer firms. Covers multiple selection, normalization, and interpretation of valuation spreads.

Lesson 1 • Designing an Optimal Payout Policy

Integrates investment needs, capital structure targets, and investor preferences into a coherent payout framework. Addresses residual dividend policy and special dividends.

Lesson 2 • Dividend Irrelevance and Real-World Frictions

Presents the MM dividend irrelevance theorem and then introduces taxes, transaction costs, and signaling to explain observed payout behavior.

Lesson 3 • Dividend Signaling and Information Content

Explains how dividend changes convey private information about future earnings. Covers the empirical evidence on market reactions to dividend announcements.

Lesson 1 • M&A Strategic Rationale and Motives

Categorizes acquisition motives including synergies, market power, and diversification. Distinguishes value-creating from value-destroying rationales using empirical evidence.

Lesson 2 • Merger Valuation and Accretion-Dilution

Builds a merger model to assess EPS accretion or dilution and NPV of synergies. Connects deal price to required synergy realization for value creation.

Lesson 3 • Deal Structuring and Consideration

Analyzes cash, stock, and mixed consideration choices and their valuation and tax implications. Covers earnouts, collars, and contingent payment structures.

Lesson 4 • Takeover Defenses and Governance

Examines defensive mechanisms and their effect on shareholder value and board accountability. Covers poison pills, staggered boards, and white knight strategies.

Lesson 1 • Enterprise Risk Management in Finance

Frames corporate risk management as a value-adding activity rather than pure cost reduction. Covers hedging rationale, risk mapping, and integration with capital allocation.

Lesson 2 • Corporate Governance and Value

Links governance mechanisms to firm value through reduced agency costs and better decision-making. Covers board structure, executive compensation, and activist investors.

Lesson 3 • Leveraged Buyout Analysis

Models LBO transactions to determine maximum bid price and investor returns. Covers debt structuring, exit assumptions, and IRR sensitivity to operating performance.

Lesson 4 • Financial Distress and Bankruptcy

Analyzes the costs of financial distress and the restructuring options available to distressed firms. Covers out-of-court workouts and formal reorganization processes.