Admission requirements
None.
Description
Corporate Finance is about the uses and courses of funding, among other things by young innovative companies. A company is focused on creating, delivering and collecting value. In Corporate Finance, this process is approached from accounting and finance; the differences between these perspectives focus mainly on value. In accounting, value is based on the price paid. In the finance, value is the present value of the (uncertain) future cash flows. Value creation has different dimensions that are studied from different perspectives – often separately. Two important aspects are the way in which investments are made and the method of financing. How can it be determined whether an intended investment is financially attractive? How are the relevant cash flows of an investment calculated? How does the company deal with uncertainty? Finance focuses on different types of assets and their capital costs, capital structure and the contractual relationship with the investors.
Course objectives
Goals(s) of the course:
Gain insight into various dimensions of value and the aspects that play a role in the valuation of an investment, share, or of the company as a whole. Being able to solve investment and financing issues from different perspectives, with numerical underpinnings without neglecting the underlying concepts.
After completing the course, students have acquired the following qualifications:
Being able to apply the basic techniques of accounting and financing in small cases. Accounting focuses on the balance sheet, profit and loss account and cash flow statement, with the basic principles of accounting. Finance focuses on the market value and the principles of financial arithmetic.
Being able to describe and apply the relationship between value, cash flows and return on investment analysis, the valuation of shares and the company.
Being able to name and explain the contractual problems (agency theory and information asymmetry) that play a role in attracting capital (financing) and any solutions to these problems.
Being able to explain and apply the relationship and differences between accounting and finance in the field of valuation.
Being able to explain and apply the operational and financial risk and the relationship with the claimed return on capital.
Being able to integrate separate insights of Corporate Finance, also with other business science disciplines, in particular strategy and marketing.
Timetable
Check MyTimetable.
Mode of instruction
Lectures
Number of 2 hours: 7
Instructor: J.A. (Jordi) den Ouden MBA
Required preparation by students: reading relevant chapters and articles per week.
Seminars ("werkgroepen")
Number of 2 hours: 7
Instructor: J.A. (Jordi) den Ouden MBA
Required preparation by students: reading and preparing case studies. Students who have not prepared will be removed from the workgroups.
Assessment method
Examination
- Exam (100%)
Areas to be tested within the exam
The exam material includes the mandatory literature, the prescribed cases, articles and what has been discussed during lectures, working groups and any other forms of education.
Reading list
Mandatory literature
Literature:
- Brealey, R.A., S.C. Myers, A.J. Marcus, Fundamentals of Corporate Finance, McGraw-Hill, (the relevant chapters are included in the schedule). The desired edition will be announced on Brightspace.
Workbook:
- This mainly contains roster technical matters. The workbook is included on Brightspace.
Suggested literature
Koller et al, Valuation: Measuring and Managing the Value of Companies 7th edition. Pearson 978-1-292-44596-0
Schoenmaker, Schramade; Corporate Finance for Long-Term Value. Springer
978-3-031-35008-5 (free e-book)
Registration
Registration for courses and exams takes place via MyStudymap. If you do not have access to MyStudymap (guest students), look here (under the Law-tab) for more information on the registration procedure in your situation.
Contact
Course coordinator: J.A. (Jordi) den Ouden MBA;
Work address: Steenschuur 25 in Leiden (B2.26);
Accessibility: by appointment;
Telephone: 071 – 527 2727;
E-mail: j.a.den.ouden@law.leidenuniv.nl.
Institution/Department
Institute: Institute of Tax Law and Economics;
Department: Business Studies;
Address secretariat: Steenschuur 25 in Leiden (B2.26);
Opening hours: Every working day (except Wednesday) from 9.00 - 17.00 hours;
Telephone secretariat: 071 – 527 7851;