This module aims to provide you with fundamentally important ideas about what to look for in making good and informed investment, financing and dividend decisions. Our analysis will focus on how the right decisions can lead to the enhancement of your firm’s value.
In examining investment decisions, we will evaluate existing investments in terms of their fit to a firm’s overall strategy and economic value. To the extent that new investments are essential to the future growth and development of a firm, the assessment of new investments will be a critical area of study. We will also explore the various means of financing a firm, including the appropriate sources of funding in the various stages of development of a firm, the suitability of the vast array of financial instruments in the financial markets and the achievement of an optimal financing mix.
In essence, dividend decisions involve the determination of how much to reinvest and how much to return to shareholders. As such, we shall look at the impact of dividend policy to future growth and development of a firm, and the rationale behind the return of cash to shareholders.
The concepts of risk and returns, of options value and applications in corporate finance, and of how to balance off the risks versus returns in asset pricing models will be discussed. This trade-off is equivalent to finding optimal value or valuation of the opportunities that present themselves to corporate business. In addition, the module will also cover important valuation principles/methodologies, applications to mergers and acquisitions situations, and value enhancement models.