FIN-330 explores key concepts such as capital budgeting, financial analysis, and risk management, extending and further developing the long-term investment and financing topics introduced in Principles or Foundations of Finance. The course addresses issues modern corporate managers face when making capital budgeting and capital structure decisions, focusing on applied managerial decision-making, the economic analysis of strategic and tactical investments, the effect financial leverage has on firm value, and the integration of investment and financial corporate strategies. Topics include advanced capital budgeting techniques, firm valuation, capital structure, firm/division cost of capital, and quantitative risk assessment.
From foundational concepts to managerial decision-making
The course explicitly extends foundational finance concepts into genuine applied managerial decision-making, requiring students to reason through the kind of real capital budgeting and structure decisions actual corporate managers face.
Financial leverage's effect on firm value
FIN-330 examines how financial leverage — the use of debt in a firm's capital structure — genuinely affects firm value, a central corporate finance question with real consequences for how companies choose to finance their operations.
Key topics in FIN330
- Advanced capital budgeting techniques
- Firm valuation
- Capital structure decisions
- Cost of capital
- Financial leverage's effect on firm value
- Quantitative risk assessment
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Worked example: leverage's double-edged effect on firm value
- Leverage benefit: Debt financing can increase returns to equity holders when a project performs well
- Leverage risk: That same debt increases financial risk and can amplify losses if a project underperforms
- Lesson: FIN-330 teaches that capital structure decisions require weighing this genuine leverage trade-off, not assuming more debt is simply better or worse
Related courses
Frequently asked questions
FIN-320 establishes foundational concepts like time value of money, basic capital budgeting, and risk-return analysis, while FIN-330 applies these foundations to genuine managerial decision-making — advanced capital budgeting techniques, capital structure decisions, and firm valuation — that real corporate managers actually navigate when running a business. FIN-330 requires this foundational base because applied corporate financial decision-making assumes students already understand the basic financial concepts being applied at this more advanced managerial level.
The decision of how much debt versus equity to use in financing a company genuinely affects both the potential returns to shareholders and the company's overall risk exposure, meaning capital structure decisions are among the most consequential choices corporate financial managers make, with real effects on firm value and financial stability. FIN-330 emphasizes leverage because understanding this trade-off is essential to making sound capital structure decisions, a core responsibility of corporate finance management.