The course introduced theories and models for evaluating real and financial investments in different contexts and provided knowledge about the role of financial markets and the relationship between companies and the financial market. It also covered the relationship between a company’s investment decisions and the functioning of capital markets, the advantages and disadvantages of various investment models and their connection to the company’s objective function, as well as theories and models regarding the company’s financing strategies in relation to the functioning of capital markets.

Key Takeaways

The course was essential in understanding various methods and models for evaluating a company’s investments, which serve as a basis for deciding whether an investment should be made.

A fundamental assumption of the course was that a company aims to maximize value and primarily exists for its shareholders. To make investments, companies need capital. The course covered methods and models for financing a company’s investments, as well as the pricing of different types of assets and how the value of an investment is linked to the company’s characteristics and the functioning of capital markets.

The course emphasized the understanding of key corporate financial concepts, including:

• Time Value of Money
• Net Present Value (NPV)
• Balance Sheets and Income Statements
• Cost of Equity (CAPM)
• Weighted Average Cost of Capital (WACC)
• Free Cash Flow (FCF)
• Stocks and Bonds
• Portfolio Theory by Markowitz and Sharpe
• Capital Structures by Miller and Modigliani