Course Objective

A basic understanding about corporate finance is required to assess the
efficiency and efficacy of a company’s business model. Would it be
possible for companies like Google, Microsoft and Uber to develop (new)
strategies and business models without insight in the present and future
financial viability of the company? Corporate finance pertains to the
sources of funding, the capital structure of corporations, and the
actions that managers take to increase the value of the firm, as well as
the tools and analysis used to allocate financial resources. The course
Business Model Assessment provides an introduction in corporate finance
for students in the program. This course has three main learning
objectives:
1. Gain knowledge of basic concepts and theories pertaining to firm
behaviors in the area of corporate finance in order to assess the
business (Bridging theory and practics - knowledge)
2. Provide standard answers to hypothetical cases, e.g. through solving
exercises from the textbook (Academic and research skills)
3. Apply obtained knowledge in corporate finance to real life cases,e.g.
interpret financial information, formulate them into standard framework,
and provide comments and remarks for corporate decision makers (Bridge
theory and practice - application) After participating in this course,
you should:
• Understand corporate finance concepts, including their strengths and
limitations in explaining the realities
• Understand unique features of these concepts and their
interrelationship, and the relevant corporate finance theories for firm
behaviors
• Have quantitative skills to apply these concepts, e.g. solve exercises
in the textbook
• Be able to choose between various concepts and apply them in real life
cases, e.g. provide advice and remarks for corporate decision makers

Course Content

The course will start with an introduction of business assessment
approaches and basic concepts. We will start with an introduction to
corporations, and proceed with financial statement analysis, financial
decision making, investment decision rules, capital budgeting, and
raising equity capital, etc. The focus is on applying concepts and
theories to real-life situations during lectures, and providing students
with feedback on their exercises and cases in the tutorials. We will
explain the basic concepts and theories in the lectures, and apply to
relevant exercises and cases in the tutorials. Students need to solve
one case in groups of 5 or 6 members, and present their reports in the
tutorials.

Teaching Methods

Lectures, tutorials

Method of Assessment

Your final course grade will be based on your written exam. More details
are available in the course manual.

Literature

The chapters, case materials and exercises will be posted on the
blackboard. We use the textbook “Corporate Finance” by Jonathan Berk and
Peter DeMarzo, 3rd edition. The case materials and exercises will be
posted on Canvas.