Corporate Finance Essentials

• Week 1 - Course Overview
  Overall Syllabus
• Week 2 - Risk and Return
  Welcome to Session 1 In this session we will discuss some basic but essential financial concepts such as mean return, volatility, and beta. We will also learn how to apply them in order to assess the performance of selected equity markets over the last decade....
• Week 3 - Correlation and Diversification
  To understand diversification, an issue at the very heart of most investment decisions, and the role that correlation plays in determining the gains from diversification.
• Week 4 - The CAPM and the Cost of Capital
  In this session we will discuss how companies assess their cost of debt, their cost of equity, and ultimately their cost of capital. We will also discuss why this last concept is at the heart of many of the most important corporate decisions.
• Week 5 - Estimating the Cost of Capital - An Application
  In this session we will put to work all the concepts discussed in the previous session by estimating the cost of capital of a company. As usual, when putting theory into practice, a few complications arise and we will discuss how to deal with them.
• Week 6 - Project Evaluation
  In this session we will discuss how companies routinely decide whether or not to invest in projects. We will discuss the two tools most widely used for this purpose, NPV and IRR, and apply them to the evaluation of an investment opportunity.
• Week 7 - Corporate Value Creation
  In this session we will discuss EVA, a tool widely used to assess whether a company is creating or destroying value. We will also put this tool into practice by estimating the EVA of two companies.

Javier Estrada
Professor of Financial Management
Department of Financial Management