FTMBA2026 Corporate Finance and Governance

Participation Prerequisites

Completion of an introductory finance course (e.g., Managerial Finance)

Course Content

This course covers the basic principles of corporate finance and develops the necessary practical tools for financial decisions and corporate valuation. After a brief introduction, which motivates the goals of a firm against the background of different corporate governance and market environments, we will take a closer look at the relationship between stock prices and the cost of equity. In this context, we will discuss practical guidelines to derive the cost of capital for single projects and for the whole firm. We will then cover the determinants of the optimal debt/equity mix and the consequences for a firm's cost of capital and valuation. In addition, the course will provide an overview of a firm's external financing alternatives (debt and equity), with a focus on the security issuance process (IPOs). Additional topics include shareholder-manager conflicts, executive compensation, and the corporation's societal role. We will also explore how ESG (environmental, social, governance) considerations impact value creation, integrating theory with real-world applications in corporate settings.

Intended Learning Outcomes and Competencies

Participants will:

• be able to apply the discounted cash flow method & have the necessary practical skills for capital budgeting
• estimate the cost of capital of a single project or a firm and assess the effects of different capital structures on the cost of capital
• understand the main characteristics of different financing sources
• be familiar with the process of taking a company public and be able to assess advantages and disadvantages of different financing sources
• be able to identify potential “red flags” for governance problems
• engage more effectively with financial stakeholders

Form of Examination

Daily quizzes (total of 20%), groupwork on case (30%), final exam (50%)

Literature

Brealey, R., S. Myers, F. Allen, and A. Edmans (2022): "Principles of Corporate Finance", McGraw‐Hill, 14th edition