Principles of capital budgeting, cost of capital, and optimal financing structures for firms.
Course overview
FINA 2840 Corporate Finance Theory examines how firms make long-term investment decisions and how they finance those investments. You will explore the principles of capital budgeting, including net present value and internal rate of return, and learn how to estimate a company's cost of capital. The course also covers optimal financing structures, examining the role of debt and equity in shaping a firm's financial strategy.
Through case studies and real-world examples, you will analyse how corporate leaders balance risk and return when raising capital and distributing profits. The course assumes you have already completed intermediate financial accounting and managerial accounting systems.
Who takes this course
This course is an elective for students in the Accounting, Accounting (Part-time), Bachelor of Applied Business — Accounting, and Financial Planning programs.
Credits: 3 · Hours: 45
Prerequisites
Learning outcomes
- Evaluate capital investment projects using net present value and internal rate of return.
- Calculate the weighted average cost of capital and analyse its impact on firm valuation.
- Assess the effects of leverage and dividend policy on corporate financial structure.
- Apply financial theory to real-world corporate financing decisions.
- Interpret financial statements to identify opportunities for value creation.
- Communicate financial analysis and recommendations to stakeholders.
Evaluation
| Component | Weight (%) |
| Midterm examination | 30 |
| Case study analysis and presentation | 25 |
| Final examination | 45 |