Corporate Financial Decision Making

This subject examines capital budgeting techniques, the capital structure decision, the distribution decision and corporate risk management at a more advanced level to that covered in FNCE10002 Principles of Finance. Topics include: the Modigliani-Miller theorems, the impact of taxes under a classical tax system, the impact of taxes under an imputation tax system, corporate acquisitions and restructuring, hybrid securities as a source of finance, techniques in raising capital.

• 1Explain the different techniques used by firms to raise equity and debt capital.
• 2Apply alternative capital budgeting techniques in the presence of taxes and differing project lives.
• 3Discuss the impact of market imperfections on a firm’s capital structure decision.
• 4Discuss the impact of market imperfections on a firm’s distribution decision.
• 5Evaluate the advantages and disadvantages of hybrid securities as a source of finance.
• 6Assess the economic consequences of corporate acquisition and restructuring activities.
• 7Explain the option-theoretic interpretation of debt and equity.