Corporate Finance II: Financing Investments and Managing Risk

Start Date: 02/23/2020

Course Type: Common Course

Course Link:

Explore 1600+ online courses from top universities. Join Coursera today to learn data science, programming, business strategy, and more.

About Course

In this course you will learn how companies decide on how much debt to take, and whether to raise capital from markets or from banks. You will also learn how to measure and manage credit risk and how to deal with financial distress. You will discuss the mechanics of dividends and share repurchases, and how to choose the best way to return cash to investors. You will also learn how to use derivatives and liquidity management to offset specific sources of financial risk, including currency risks. Finally, You will learn how companies finance merger and acquisition decisions, including leveraged buyouts, and how to incorporate large changes in leverage in standard valuation models. Upon successful completion of this course, you will be able to: • Understand how companies make financing, payout and risk management decisions that create value • Measure the effects of leverage on profitability, risk, and valuation • Manage credit risk and financial distress using appropriate financial tools • Understand the links between payout policies and company performance • Use derivatives and liquidity management to offset financial risks • Pick an appropriate financing package for an M&A or leveraged buyout deal This course is part of the iMBA offered by the University of Illinois, a flexible, fully-accredited online MBA at an incredibly competitive price. For more information, please see the Resource page in this course and

Course Syllabus

In Module 1, we will discuss the differences between debt and equity financing for corporations. We will then learn how to avoid usual mistakes that people make when analyzing the choice between debt and equity. We will work with financial statements to understand the impact of higher debt on corporate profits, and we will learn how debt and risk are fundamentally related. Finally, we will use our knowledge to understand how companies choose how much debt to have.

Deep Learning Specialization on Coursera

Course Introduction

Corporate Finance II: Financing Investments and Managing Risk In this course you will learn how to design financial statements for value creation and to understand the concepts of equity, debt and risk. You will gain familiarity with the concepts of valuation and cost allocation and will learn about the different valuation techniques. You will learn about the concepts of asset value, risk and income before accounting for assets such as cash, securities and derivatives. You will also learn how to allocate capital between risk and ownership. Finally, you will learn the process of debt valuation and how to manage debt. You’ll also learn about asset-based valuation, cost allocation and portfolio optimization. Upon successful completion of this course you will be able to: • Describe the purpose of asset valuation and cost allocation methods; • Understand the concepts of risk and income before accounting for assets such as cash, securities and derivatives; • Understand the process of debt valuation and cost allocation in accounting for assets such as cash, securities and derivatives; • Understand the portfolio optimization method and the income statement used for asset-based valuation; • Understand the portfolio optimization method and the income statement used for asset-based valuation; • Understand the process of debt valuation and cost allocation in accounting for assets such as cash, securities and derivatives; • Understand the process of debt valuation and cost allocation in accounting for assets such as cash, securities and derivatives; • Understand the process of debt valuation and cost allocation

Course Tag

Risk Management Corporate Finance Mergers And Acquisitions (M&A) Debt

Related Wiki Topic

Article Example
Finance Finance is a field that deals with the study of investments. It includes the dynamics of assets and liabilities over time under conditions of different degrees of uncertainty and risk. Finance can also be defined as the science of money management. Finance aims to price assets based on their risk level and their expected rate of return. Finance can be broken into three different sub-categories: public finance, corporate finance and personal finance.
Experimental finance Fields to which experimental methods have been applied include corporate finance, asset pricing, financial econometrics, international finance, personal financial decision-making, macro-finance, banking and financial intermediation, capital markets, risk management and insurance, derivatives, quantitative finance, corporate governance and compensation, investments, market mechanisms, SME and microfinance and entrepreneurial finance.
IDLC Finance Limited In Corporate Division they have Corporate Finance (Lease Financing, Term Loan Financing, Working Capital Financing, Project Financing and Specialized Products), Structured Finance (Fund-raising, Advisory Services, Securitization of Assets and FAQ) and Fees and Charges.
Corporate finance Achieving the goals of corporate finance requires that any corporate investment be financed appropriately. The sources of financing are, generically, capital self-generated by the firm and capital from external funders, obtained by issuing new debt and equity (and hybrid- or convertible securities). As above, since both hurdle rate and cash flows (and hence the riskiness of the firm) will be affected, the financing mix will impact the valuation of the firm. There are two interrelated considerations here:
Corporate finance The terms corporate finance and corporate financier are also associated with investment banking. The typical role of an investment bank is to evaluate the company's financial needs and raise the appropriate type of capital that best fits those needs. Thus, the terms "corporate finance" and "corporate financier" may be associated with transactions in which capital is raised in order to create, develop, grow or acquire businesses. Recent legal and regulatory developments in the U.S. will likely alter the makeup of the group of arrangers and financiers willing to arrange and provide financing for certain highly leveraged transactions.
Risk financing Traditional forms of finance include risk transfer, funded retention by way of reserves (often called self-insurance) and risk pooling.
Corporate finance This area is related to corporate finance in two ways. Firstly, firm exposure to business and market risk is a direct result of previous capital financial investments. Secondly, both disciplines share the goal of enhancing, or preserving, firm value. There is a fundamental debate relating to "Risk Management" and shareholder value. Per the Modigliani and Miller framework, hedging is irrelevant since diversified shareholders are assumed to not care about firm-specific risks, whereas, on the other hand hedging is seen to create value in that it reduces the probability of financial distress. A further question, is the shareholder's desire to optimize risk versus taking exposure to pure risk (a risk event that only has a negative side, such as loss of life or limb). The debate links the value of risk management in a market to the cost of bankruptcy in that market.
Kasikornbank Corporate Business offers financial products, services and solutions to larger corporation e.g. Corporate Finance & Investments, Supply Chain Financing, FX & Derivatives, K-Value Chain Solutions.
Corporate finance Managing the corporation's working capital position to sustain ongoing business operations is referred to as "working capital management". These involve managing the relationship between a firm's short-term assets and its short-term liabilities. In general this is as follows: As above, the goal of Corporate Finance is the maximization of firm value. In the context of long term, capital budgeting, firm value is enhanced through appropriately selecting and funding NPV positive investments. These investments, in turn, have implications in terms of cash flow and cost of capital. The goal of Working Capital (i.e. short term) management is therefore to ensure that the firm is able to operate, and that it has sufficient cash flow to service long-term debt, and to satisfy both maturing short-term debt and upcoming operational expenses. In so doing, firm value is enhanced when, and if, the return on capital exceeds the cost of capital; See Economic value added (EVA). Managing short term finance and long term finance is one task of a modern CFO.
Principles of Corporate Finance The book covers a wide range of aspects relevant to corporate finance, illustrated by examples and case studies. The text starts with explaining basic finance concepts of value, risk, and other principles. Then the issues become more and more complex, from project analysis and net present value calculations, to debt policy and option valuation. Other discussed topics include mergers and acquisitions, principal–agent problems, credit risk, working capital management, etc. The book concludes with a discussion on the current limitations of the corporate finance theory.
Corporate finance Corporate finance is the area of finance dealing with the sources of funding and the capital structure of corporations, the actions that managers take to increase the value of the firm to the shareholders, and the tools and analysis used to allocate financial resources. The primary goal of corporate finance is to maximize or increase shareholder value. Although it is in principle different from managerial finance which studies the financial management of all firms, rather than corporations alone, the main concepts in the study of corporate finance are applicable to the financial problems of all kinds of firms.
Identifying and Managing Project Risk Identifying and Managing Project Risk by Tom Kendrick is a book about identifying and managing risks on projects. It was published on April 25, 2003 by American Management Association.
Islamic Finance House Encompass vehicle and project/contract financing, labor guarantees(AL Rabeh), corporate covered cards, Islamic covered drawing, commodity murabaha, lease finance (Ijarah) and trade finance.
Risk financing In business economics, risk financing is concerned with providing funds to cover the financial effect of unexpected losses experienced by a firm.
Principles of Corporate Finance Principles of Corporate Finance is a reference work on the corporate finance theory edited by Richard Brealey, Stewart Myers, and Franklin Allen. The book is one of the leading texts that describes the theory and practice of corporate finance. It was initially published in October 1980 and now is available in its 12th edition. "Principles of Corporate Finance" has earned loyalty both as a classroom tool and as a professional reference book.
Corporate finance Use of the term "corporate finance" varies considerably across the world. In the United States it is used, as above, to describe activities, analytical methods and techniques that deal with many aspects of a company's finances and capital. In the United Kingdom and Commonwealth countries, the terms "corporate finance" and "corporate financier" tend to be associated with investment banking – i.e. with transactions in which capital is raised for the corporation. These may include
J.P. Morgan in the United Kingdom Provides corporate banking services to large corporations, financial institutions and public sector organizations. Services include financing, risk management, working capital, cash management and investments.
Commercial finance advisor A commercial finance advisor is a professional banker whom businesses contract to consult on business financing and corporate banking relationships.
Time at risk Time at Risk (TaR) is a time-based risk measure designed for corporate finance practice.
Risk management As applied to corporate finance, "risk management" is the technique for measuring, monitoring and controlling the financial or operational risk on a firm's balance sheet, a traditional measure is the value at risk (VaR), but there also other measures like profit at risk (PaR) or margin at risk. The Basel II framework breaks risks into market risk (price risk), credit risk and operational risk and also specifies methods for calculating capital requirements for each of these components.