Corporate Investment Policy

Elective course, 1.5 credits
Faculty: Alan Crane
Expected start date: November 15, 2019

This course examines the investment decisions faced by corporate financial managers. You will begin by developing a general framework for corporate valuation, and then you will use this framework to review and expand on the capital budgeting issues developed in the core Finance course. For example, you will review the foundations of option valuation and then apply these tools to value real options.

The course also covers new material on estimating the cost of capital and the effects of leverage. In this course, you will learn the state of the art in the analysis of corporate investment decisions.

The course format is a mixture of theory, empirical evidence and practical application:

  1. The theory provides the framework for analysis.
  2. The empirical evidence provides a core of stylized facts to support your theoretical intuition.
  3. The practical applications put to use the theoretical foundations and empirical evidence in real-world decision making.