Capital Budgeting: Theory and Practice

Course guarantor:

Lecturer:

Tutor:

Supervisor:

Department of Management and Economics

Synopsis:

The course will familiarize students with assorted topics of the advanced theory of corporate finance, with an emphasis on quantitative methods, capital budgeting, financing and valuation. Applications will focus on particular issues, relating to the student‘s thesis.

Requirements:

Students are required to be familiar with MSc-level corporate financial management. Each student will submit an individual written assignment.

Syllabus of lectures:

1.Introduction, reference to prerequisites and subject of thesis

2.Theoretical fundaments of corporate finance, their development and practical contexts

3.Capital budgeting criteria and their application; cash flow estimates

4.Issues in determining the discount rate and cost of capital

5.Investment decisions under uncertainty

6.Real options and their application for capital budgeting and valuation

7.Corporate valuation models

8.Decision-making in Mergers, Acquisitions and Divestitures

9.Capital structure and financing decisions

10.Agency theory, information asymmetry, and its consequences

11.Company in financial distress and under restructuralization

12.Case study and consultation related to the subject of thesis

13.Written assignment presentation and interview

Syllabus of tutorials:

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Study materials:

Core Literature:

[1]Copeland, T.E., Weston, J.F., Shastri, K. Financial Theory and Corporate Policy. 4 ed. Pearson, Boston 2005. ISBN 0-321-12721-8

[2]Ogden, J.P., Jen, F.C., O’Connor, P.F. Advanced Corporate Finance: Policies and Strategies. Prentice Hall, Upper Saddle River 2003. ISBN 0-13-091568-8

[3]Damodaran, A. Investment Valuation: Tools and Techniques for Determining the Value of Any Asset. 3 ed. John Wiley, Hoboken 2012. ISBN 971-1-118-01152-2

[4]Bierman, H., Smidt, S. The Capital Budgeting Decision: Economic Analysis of Investment Projects. 9 ed. Routledge, New York 2007. ISBN 978-0-415-40003-9

Recommended Literature:

[5]Tirole, J. The Theory of Corporate Finance. Princeton University Press, Princeton 2006. ISBN 978-0-691-12556-5

[6]Mun, J. Real Options Analysis: Tools and Techniques for Valuing Strategic Investments and Decisions. 2 ed. John Wiley, Hoboken 2006. ISBN 978-0-471-74748-2

[7]Vlachý, J. Corporate Finance: Exercises. Leges, Praha 2015. ISBN 978-80-7502-085-7

Note:

Further information:

No time-table has been prepared for this course

The course is a part of the following study plans: