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Prospectus

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Advanced Financial Management

Course
2012-2013

Tags

[BSc]
En, Ec

Admission Requirements

  • Business and Entrepreneurship

  • Financial Management

Students that do not meet this prerequisite should contact the instructor regarding the required competencies before course allocation.

Description

Advanced Financial Management is the second financial course in the minor business studies. The focus of the course is on corporate finance. Corporate finance is about the efficient attracting and investing of corporate funds. A major issue is the trade-off between risk and return. Analysis of investments is done with the use of particular investment appraisal techniques. An important issue is the identification of the appropriate cash flows. Furthermore, the funding of the corporation is studied, to start with the cost of capital. Different types of equity financing will be discussed, as well as the capital structure of equity and debt financing. The causes and effects of the credit crisis are integrated in all topics that relate to the financial markets.

Course Objectives

  • To gain knowledge and skills in corporate finance and the links with other topics in business studies, with regard to the topics of investment and project appraisals, capital structure, cost of capital and mergers and acquisitions.

  • To understand the different perspectives on corporate finance (investors, managers and intermediaries).

  • To understand how the financial markets function.

  • To understand the causes and effects of the credit crisis, and the latest developments in the financial markets.

Mode of Instruction

The classes are taught with a combination of instruction, group-wise solving of practical and theoretical problems with exercises and much discussion on the links between theory and practical issues in corporate finance. Students are expected to actively participate in finding solutions to exercises and in the discussions.

Class instruction is done with the use of PowerPoint sheets and multimedia martial on course contents and recent developments in the financial markets.
Assessments are done with exams and written assignments. These are all individual.

Assessment

Assessment: Mid-term exam
Percentage: 20%
Deadline: Week 4

Assessment: Case study; written assignment (to be done at home)
Percentage: 20%
Deadline: Week 5

Assessment: Short analysis of scientific article; written assignment (to be done at home); list of articles to be chosen to be provided in the reader on Blackboard.
Percentage: 20%
Deadline: Week 7

Assessment: Final exam
Percentage: 40%
Deadline: Week8

Literature

Brealey, R.A., S.C. Myers, A.J. Marcus, Fundamentals of Corporate Finance, McGraw-Hill, 7th international edition, ISBN 9780071314749

Additional readings on Blackboard

Contact Information

Dr. R.P. Orij, r.p.orij@law.leidenuniv.nl

Weekly Overview

  1. Intro + Financial Markets and Banks
    1. Investment Appraisals
    2. Project analysis
    3. Cost of capital
    4. Financing of a Corporation
    5. Capital Structure Mergers and Acquisitions
    6. Risk Management

Preparation for first session

Brealey/Myers/Marcus chapters 1 and 2 (on banking)