Corporate Finance

Corporate finance for managers in Canada, with capital cost allowance, Canadian tax rates and Government of Canada yields: the goal of the firm and agency problems, time value of money, bond pricing, yields and duration, valuing shares with dividend discount and free cash flow models, NPV, IRR and their pitfalls, project cash flows and the tax value of depreciation, risk, return and diversification, beta, the CAPM and the weighted average cost of capital, Modigliani-Miller, interest tax shields and financial distress, dividends and share buybacks, company valuation with DCF and multiples, ending in a capstone valuation and financing decision for Cedarline Outdoor, with runnable Python examples.

MBA-511 3 credits 12 lessons · 3 h 54 min ▶ Video lessons coming soon

Offered by HSM University · MBA Core

This is the Canadian version of this course. See the American version.

What you'll learn

Explain the investment, financing and payout decisions of the firm, why value rather than profit is the right objective, and how agency problems between owners, managers and lenders are controlled.
Value cash flows of any pattern using compounding, discounting, annuities, perpetuities and growing perpetuities, converting quoted interest rates to effective rates and matching nominal and real rates.
Price bonds and calculate yields to maturity and duration, interpret the yield curve and explain how credit ratings, seniority and covenants affect the cost of debt.
Value shares with the Gordon and two-stage dividend discount models and with free cash flow to the firm, and separate the value of current earnings from the present value of growth opportunities.
Evaluate capital projects with NPV, IRR, MIRR, payback and the profitability index, and explain when IRR misleads, including mutually exclusive projects and multiple IRRs.
Estimate incremental after-tax project cash flows, including opportunity costs, working capital, salvage value and the tax shield from accelerated tax depreciation.
Measure risk and return, explain how diversification removes unique risk, and judge whether corporate diversification creates value for shareholders.
Estimate beta, the cost of equity with the CAPM and the weighted average cost of capital, and choose project or divisional discount rates using pure-play comparables.
Analyse capital structure using the Modigliani–Miller propositions, interest tax shields, costs of financial distress, the pecking order, Hamada betas and adjusted present value.
Recommend payout policy by comparing dividends and share repurchases in terms of value, earnings per share, taxes, signalling and flexibility.
Value a company with a discounted cash flow model and with trading and transaction multiples, test the result with sensitivity analysis and judge how much of the synergies a buyer should pay.
Integrate valuation, real options and financing analysis into a board recommendation with conditions that link investment to performance and leverage.

Course content

12 lessons · 3 h 54 min total · final exam

1 The goal of the firm and the finance function 21 min · quiz
2 Time value of money and valuing cash flows 19 min · quiz
3 Valuing bonds and interest rates 19 min · quiz
4 Valuing stocks: dividend discount and free cash flow models 19 min · quiz
5 Capital budgeting: NPV, IRR and their pitfalls 20 min · quiz
6 Estimating project cash flows 19 min · quiz
7 Risk, return and diversification 19 min · quiz
8 The CAPM, beta and the cost of capital (WACC) 19 min · quiz
9 Capital structure: Modigliani–Miller, taxes and distress 19 min · quiz
10 Payout policy: dividends and buybacks 19 min · quiz
11 Valuation of a company: DCF and multiples 19 min · quiz
12 Capstone: valuing Cedarline Outdoor and a financing decision 22 min · quiz
E Final exam 20 questions

Requirements

MBA-501 Financial and Managerial Accounting

Recommended background. You can start any course at any time.