VVZ API is not affiliated with ETH Zurich. Data might be outdated or incorrect. Please view the official ETHZ Vorlesungsverzeichnis for binding information.
Corporate Finance
Last Updated: 2026-06-01 11:33:46
Abstract
The course leads to a comprehensive understanding of the theory and practice of corporate finance. The core modules include Introduction to Corporate Finance, Corporate Investment Decisions & Valuation, and Corporate Financial Policy. Students will be able to assess the valuation of firms, projects, and financial securities with an informed perspective on the capital structure and payout policy.
Objective
- To introduce you to the theory and practice of corporate finance. - To provide you with a set of tools necessary to answer the most important questions related to valuing firms, and projects within firms. - To give you some insight into investment decision making and personal finance.
Content
The course is comprised of three building blocks, which build towards the overall goal of being able to value the wealth gain created from a project within a business, or to value the business itself: 1. Present and Future Value We will begin our discussion of valuation with the notion of discounting. A dollar today is worth more than a dollar tomorrow. A dollar tomorrow is worth less than one today. As we will discover, this simple idea will take us a long way towards valuing various financial instruments where cash flows are known or can be easily estimated. We can apply this idea to find the value (and hence, market price of) securities such as stocks and bonds. 2. Investment Decisions Next, we will proceed to the analysis of how firms should choose their investments. The difference here from the first part of the course is that the cash flows from firms business investments are not known and have to be estimated. We will learn how to identify cash flows relevant to the valuation of an investment project (the “free cash flow” method) and how to employ the Net Present Value criterion to make investment decisions. (If time allows, we will also cover the Internal Rate of Return criterion and the payback rule.) 3. Risk and Return In the final quarter of the course, we will study the relation between risk and return. The riskier the investment, the higher the return we require from it to be willing to invest. The study of the relationship between risk and return will lead us to discuss one way of estimating expected returns – the Capital Asset Pricing Model (CAPM). We will apply the logic of CAPM to decide on a discount rate for firms’ investment projects using the concept of Weighted Average Cost of Capital (WACC). 4. Our Goal: Understanding Business Valuation Valuation, and value-based decision-making is the most important function of finance and it is the goal that we are working towards. If you have studied diligently, at the end of the course you will be able to value a firm or a project with a given capital structure. You will be able to put this knowledge into practice to value your own business or projects within your own business!
General Information
- Language
- English
- Levels
- NDS
- Frequency
- Yearly recurring
Examination
- Type
- end-of-semester examination
- Mode
- written 60 minutes
- Aids
- Written aids- A non-programmable calculator (+/-/*/÷) and one A-4 cheat-sheet (writable or printable on both sides).
Registration & Places
- Max Places
- 80
- Signup End
- 09.02.2025
Course Components
| Type | Title | Time & Place | Hours |
|---|---|---|---|
| lecture |
Corporate Finance
Three-day course:
Thursday and Friday: 09:15-18:00; Saturday: 09:15-16:45.
|
|
24 h semesterly |