- Understand what finance theory says about how risky securities are priced in equilibrium.
- Understand what finance theory has to say about the mix between debt and equity finance for a firm.
- Understand the implications of the previously mentioned points for risky investment valuation.
- Understand dividends: Why do firms pay dividends? Do investors demand dividends? Should dividends matter for the firm or the investor?
- Learn about derivatives and their use as risk management tools by firms and investors.

The course deals with basic issues in finance, such as risk diversification and asset pricing, capital structure, investment valuation, market efficiency, dividend policy and the use of derivatives.

Berk & De Marzo, Corporate Finance, Pearson

• Students are expected to understand the following finance concepts:
  • types of securities (stocks, bonds) and their returns
  • the concept of risk diversification and efficient frontiers
  • principles of time value of money.
• Exchange students need to have taken at least one introductory finance course.
• An advanced level of English.