Financial Decision Making

Students in this course will learn valuation techniques including adjusted present value, equity cash flows, and real-option valuation. In addition to comparing alternative valuation techniques and the assumptions and limitations underlying each, students explore the technical difficulties and incentive effects caused by high leverage, the relation between capital structure and capital costs, the interaction between a firm's financial structure and its business strategies, the conditions contributing to potential under or over-valuation of a firm's prospects by the market, and the managerial consequences of such mis-valuation.