Corporate Financial Management

Course Number 1416

Senior Lecturer Timothy A. Luehrman
Fall, 29 Sessions
Exam

Career Focus

Corporate Financial Management (CFM) is an advanced corporate finance course. The course's goal is to develop the theoretical and practical tools essential to the execution of a Corporate Financial Officer's (CFO's) job. As a consequence, the course is appropriate for students who intend to pursue a career in finance (e.g., in the finance area of a corporation, or servicing corporate clients in a financial institution, or as an analyst or portfolio manager), or to launch a senior general management career from a finance specialization. The course also serves students who want to develop analytical skills for evaluating strategic and investment decisions.

Educational Objectives

The course's theme is how CFOs can create value through integrated financial, strategic, and operating decisions. Students build the knowledge and skills critical to the CFO's responsibilities of evaluating investment decisions; proposing, assessing, and implementing financial decisions; and evaluating and managing risk. The course introduces advanced valuation techniques and stresses a rigorous understanding of what creates value and why. Although the course is focused on the responsibilities of the CFO and involves advanced analytic techniques, it adopts a general management perspective on the corporate finance function.

Course Content and Organization

CFM is organized into six modules.

Module I. Introduction and Basic Extensions
Module II. Real Options
Module III. Liability and Risk Management
Module IV. Project Finance
Module V. Mergers, Acquisitions and Corporate Restructuring
Module VI. Review

The first module serves the dual purpose of reviewing fundamental finance principles and mechanics introduced in Finance I and II, and introducing extensions of those tools. As we move through the other modules, new valuation techniques - including equity cash flows, real option pricing, and cross-border valuation - will be introduced. The Liability and Risk Management module explores the objectives and methods of active risk managment programs. The Project Finance module examines structuring and financing problems and opportunities associated with substantial free-standing projects. Throughout the course we consider interactions between a firm's financial decisions and its business strategies.