Корпоративные финансы

Бакалавриат 2020/2021

Лучший по критерию «Полезность курса для расширения кругозора и разностороннего развития»

Статус: Курс по выбору (Экономика и статистика)

Направление: 38.03.01. Экономика

Где читается: Факультет экономических наук

Когда читается: 3-й курс, 3 модуль

Формат изучения: без онлайн-курса

Преподаватели: Виноградова Вероника Сергеевна, Ивашковская Ирина Васильевна, Малышев Павел Юрьевич, Микова Евгения Сергеевна, Ованесова Юлия Сергеевна, Пирогов Никита Константинович

Язык: английский

Кредиты: 3

Контактные часы: 40

Full Syllabus

Abstract

The course develops theoretical framework for understanding and analysing major financial problems of a corporation operating in market environment. The course covers capital budgeting issues, capital structure theory, payout policy, risk management discussions and M&A motives. The course is based on lectures, classes, groupwork and self-study. Financial Economics is the mandatory prerequisite for Corporate Finance.

Learning Objectives

Understand and apply principles of modern financial analysis
Be able to discuss different stakeholders’ goals as a source of agency conflicts
Understand and apply capital budgeting techniques when making investment decisions
Be able to discuss the logic of capital structure decisions and understand how market imperfections influence capital structure decisions
Understand corporate payout decisions and be able to discuss market reaction to dividend payout
Be able to discuss logic of risk management decisions and sources to increase company value
Be able to discuss M&A motives and value creation via restructuring

Course Contents

Introduction: Modern Company and Its Environment
From accounting to financial approach. Market capitalization and enterprise value. Maximizing the value of the business as a key shareholders’ goal: financing decisions, investment decisions, payout policy and risk management decisions. Financial decisions: changes across the lifecycle. Perfect capital market as environment to develop noncompromising Net Present Value rule. No arbitrage condition on capital markets versus possibility of arbitrage on markets of real assets: the main reason to invest in real assets. Company’s stakeholders: their goals and agency conflicts. Theory of the firm: ownership versus control of corporations. Corporations in emerging and developed markets: does business environment matter? What do equityholders buy: the dividend stream vs. capital gains. Prioritizing investment decision and dividend payout decisions when capital markets don’t offer arbitrage opportunities. The Free Cash Flow concept to determine dividend size. Two stage approach to valuation compared to stable growth case. Positive return spread together with investment decisions as an opportunity to increase equity value.
Investment decisions: Capital Budgeting
Investment opportunities of a corporation. Cash flows of an investment project. Project risk, cost of capital and discounted cash flows. Applying net present value (NPV) methodology in capital budgeting. Mutually exclusive projects. Profitability index (PI) as a relative measure of present value. Internal rate of return (IRR): methodology and limitations. Time constraints: discounted payback method. Value creation with efficient investment projects.
Capital Structure Choice and Corporate Value
Modigliani and Miller theorem (MM) on capital structure, perfect capital market assumptions and basic MM irrelevance propositions. Weighted average cost of capital (WACC): a portfolio approach to determine the overall opportunity cost of capital. Competing definitions of WACC. Cost of debt, cost of equity and WACC under pure MM. Shareholder reaction to changes in capital structure. MM propositions with corporate income taxes. Income tax shield as motivation to take debt. Motivation of WACC behavior. The effect of personal taxes on capital structure. Miller equilibrium model. Tradeoff theory as a model of optimal capital structure: tax shield vs financial distress costs. Firm value vs WACC under tradeoff theory.
Agency Cost and Asymmetric Information
A debtholder – equityholder conflict: debt overhang problem, asset substitution problem, debt covenants and monitoring opportunities as means to agency costs. An equityholder – manager conflict: overinvestment problem, deficient management efforts, aligning the conflicting interests with capital structure. Minimizing the total cost of two agency conflicts with capital structure choice. The information conveyed by capital structure decisions: pecking order theory.
Payout Policy
Types of dividends: cash dividend, stock dividend, share repurchase. Payout policy as a financing problem. The Modigliani-Miller payout irrelevance theorem. Neither dividend size nor means of delivery matters under MM. The effect of investor taxes: a preference for capital gains compared to cash distributions. The dividend puzzle. Static clientele theory. Lintner’s stylized empirical facts. Signaling role of dividends. Payout decisions as means to align the interests of managers and shareholders.
Interrelation of Financing and Investment Decisions
Adjustments to capital budgeting techniques when evaluating a project under certain financing plan. Adjusted present value (APV), weighted average cost of capital (WACC) approach and free cash flow to equity (FCFE): three classical approaches to account for side effects.
Valuation and Risk Management Policy
Risk and the M&M theorem. The motivation to hedge: decrease tax payments, decrease costs of financial distress, improve planning for capital needs. The methods of interest rate risk management. Foreign exchange risk management. Application of risk management to industrial firms.
M&A and Corporate Restructuring
Types of M&A. Reasons to acquire: economies of scale, vertical integration, financing side motivation. Hubris hypothesis by Roll. Empirical evidence of inefficient M&As. Value creation via restructuring. Divestitures and bankruptcy as types of corporate restructuring. The sources for synergy in restructuring.
Group project presentations

Assessment Elements

Class participation
Quiz
Group Project
Mid-Term Test
Final Exam
Экзамен проводится в письменной форме (решение задач, ответы на теоретические вопросы) с использованием асинхронного прокторинга. Экзамен проводится на платформе Экзамус (https://hse.student.examus.net). К экзамену необходимо подключиться за 15 минут до начала. На платформе Экзамус доступно тестирование системы. Компьютер студента должен удовлетворять следующим требованиям: https://elearning.hse.ru/data/2020/05/07/1544135594/Технические%20требования%20к%20ПК%20студента.pdf Для участия в экзамене студент обязан: заранее зайти на платформу прокторинга, провести тест системы, включить камеру и микрофон, подтвердить личность. Во время экзамена студентам запрещено: общаться (в социальных сетях, с людьми в комнате), списывать. Во время экзамена студентам разрешено пользоваться обычным калькулятором (без режима программирования). Кратковременным нарушением связи во время экзамена считается прерывание связи до 10 минут. Долговременным нарушением связи во время экзамена считается прерывание связи 10 минут и более. При долговременном нарушении связи студент не может продолжить участие в экзамене. Процедура пересдачи аналогична процедуре сдачи.

Interim Assessment

Interim assessment (3 module)
0.05 * Class participation + 0.5 * Final Exam + 0.15 * Group Project + 0.25 * Mid-Term Test + 0.05 * Quiz

Bibliography

Recommended Core Bibliography

Principles of Corporate Finance, 11tn global ed., XXVIII, 889 p., AP 1-10, Gl 1-18, I 1-25, Brealey, R. A., Myers, S. C., Allen, F., 2014

Recommended Additional Bibliography

Study Guide to Accompany Brealey and Myers "Principles of Corporate Finance, 4th ed.", D'Ambrosio, C. A., 1991

Course Syllabus