In this course you will learn how companies decide on how much debt to take, and whether to raise capital from markets or from banks. You will also learn how to measure and manage credit risk and how to deal with financial distress. You will discuss the mechanics of dividends and share repurchases, and how to choose the best way to return cash to investors. You will also learn how to use derivatives and liquidity management to offset specific sources of financial risk, including currency risks. Finally, You will learn how companies finance merger and acquisition decisions, including leveraged buyouts, and how to incorporate large changes in leverage in standard valuation models.
Offered By
Financial Management SpecializationUniversity of Illinois at Urbana-ChampaignAbout this Course
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Learner Career Outcomes
33%
started a new career after completing these courses
40%
got a tangible career benefit from this course
25%
got a pay increase or promotion
Shareable Certificate
Earn a Certificate upon completion
100% online
Start instantly and learn at your own schedule.
Course 6 of 7 in the
Flexible deadlines
Reset deadlines in accordance to your schedule.
Approx. 20 hours to complete
English
Subtitles: Arabic, French, Portuguese (European), Chinese (Simplified), Italian, Vietnamese, Korean, German, Russian, Turkish, English, Spanish
Skills you will gain
Risk ManagementCorporate FinanceMergers And Acquisitions (M&A)Debt
Learner Career Outcomes
33%
started a new career after completing these courses
40%
got a tangible career benefit from this course
25%
got a pay increase or promotion
Shareable Certificate
Earn a Certificate upon completion
100% online
Start instantly and learn at your own schedule.
Course 6 of 7 in the
Flexible deadlines
Reset deadlines in accordance to your schedule.
Approx. 20 hours to complete
English
Subtitles: Arabic, French, Portuguese (European), Chinese (Simplified), Italian, Vietnamese, Korean, German, Russian, Turkish, English, Spanish
Offered by
University of Illinois at Urbana-Champaign
The University of Illinois at Urbana-Champaign is a world leader in research, teaching and public engagement, distinguished by the breadth of its programs, broad academic excellence, and internationally renowned faculty and alumni. Illinois serves the world by creating knowledge, preparing students for lives of impact, and finding solutions to critical societal needs.
Start working towards your Master's degree
This course is part of the 100% online Master of Business Administration (iMBA) from University of Illinois at Urbana-Champaign.
If you are admitted to the full program, your courses count towards your degree learning.
Syllabus - What you will learn from this course
1 hour to complete
Course Orientation
You will become familiar with the course, your classmates, and our learning environment. The orientation will also help you obtain the technical skills required for the course.
1 hour to complete
2 videos (Total 13 min), 4 readings, 1 quiz
2 videos
Welcome to Corporate Finance II: Financing Investments and Managing Risk11m
4 readings
Syllabus10m
About the Discussion Forums10m
Glossary10m
Getting to Know Your Classmates10m
1 practice exercise
Orientation Quiz30m
4 hours to complete
Module 1: Raising Financing: The Capital Structure Decision
In Module 1, we will discuss the differences between debt and equity financing for corporations. We will then learn how to avoid usual mistakes that people make when analyzing the choice between debt and equity. We will work with financial statements to understand the impact of higher debt on corporate profits, and we will learn how debt and risk are fundamentally related. Finally, we will use our knowledge to understand how companies choose how much debt to have.
4 hours to complete
12 videos (Total 122 min), 2 readings, 3 quizzes
12 videos
Issuing Debt and Equity – The Mechanics11m
Should a Company Issue Debt or Equity?9m
Two Misconceptions8m
Debt Increases Systematic Risk10m
Evidence From the Field: Which Type of Capital Do Firms Prefer?9m
The Effect of Leverage On Taxes and Profits7m
Leverage and Personal Taxes9m
Leverage and the Risk of Financial Distress9m
The Trade-off Theory of Capital Structure7m
Analog Outfitters30m
1-11: Module 1 Review3m
2 readings
Module 1 Overview10m
Module 1 Readings10m
3 practice exercises
Practice Quiz 130m
Practice Quiz 230m
Module 1 Quiz30m
5 hours to complete
Module 2: Understanding Debt Financing and Payout Policy
In Module 2 we will dig deeper into the mechanics and the institutional details that are important to understand debt financing. We will learn models that allow us to link default probabilities to yields on a company’s debt. We will discuss the roles of credit ratings and credit default swaps for debt markets. We will learn the importance of non-price contractual terms such as debt covenants, collateral and seniority. We will use this knowledge to understand how companies choose between bank debt and bond financing. Finally, we will discuss how payout decisions (dividends and share repurchases) affect firm value and how companies choose their optimal payout policy.
5 hours to complete
12 videos (Total 110 min), 2 readings, 5 quizzes
12 videos
Pricing Debt: Yield to Maturities, and Default Probabilities12m
Credit Ratings: Determinants and Implications12m
Credit Default Swaps10m
The Many Different Types of Debt8m
Bank or Market Financing?13m
Do Dividends and Share Repurchases Affect Firm Value?9m
Main Factors Driving Payout Decisions8m
Dividends or Repurchases?11m
2-10: Module 2 Review2m
Assignment 1 Overview1m
Assignment 1 Discussion16m
2 readings
Module 2 Overview10m
Module 2 Readings10m
4 practice exercises
Practice Quiz 130m
Practice Quiz 230m
Practice Quiz 330m
Module 2 Quiz30m
3 hours to complete
Module 3: Risk Management
In Module 3 we will identify good and bad reasons why companies engage in risk management, or hedging. We will learn the mechanics of how to use derivatives such as forwards and futures to eliminate specific risks. We will also discuss how to manage risks that cannot be hedged with derivatives. In particular, we will learn that appropriate liquidity management can work as a substitute for hedging strategies. We will also discuss how and why to hedge currency risk, and how to think about a company’s cost of capital when making cross-border investments.
3 hours to complete
11 videos (Total 96 min), 2 readings, 3 quizzes
11 videos
Good and Bad Reasons to Hedge9m
Forward Contract6m
Futures Contracts9m
Hedge Ratios and Imperfect Hedging7m
Liquidity as a Substitute for Hedging12m
Bilateral Contracts9m
Operational Hedging10m
Currency Risk and the Cost of Capital13m
Adjusting the Cost of Capital for International Projects11m
3-11 Module 3 Review3m
2 readings
Module 3 Overview10m
Module 3 Readings10m
3 practice exercises
Practice Quiz 130m
Practice Quiz 230m
Module 3 Quiz30m
6 hours to complete
Module 4: Financial Management of Acquisitions and R&D
In Module 4, we will apply the financial management tools that we developed in this course to M&A decisions and R&D programs. We will learn how to finance an M&A deal, and how companies choose between cash and stock payments to acquire target companies. We will also discuss the financing of LBOs (leveraged buyouts), and learn how to model a leveraged buyout using Excel. We will then discuss the financial management of R&D programs, with an emphasis on risk management. Specifically, we will learn how to think about the financing of R&D in a dynamic framework that considers the need to make uncertain follow up investments.
6 hours to complete
14 videos (Total 158 min), 2 readings, 5 quizzes
14 videos
Means of Payment in M&A16m
Capital Structure and Payout Policy in M&A Part I12m
Capital Structure and Payout Policy in M&A Part II12m
Financing Private Equity Deals Part I8m
Financing Private Equity Deals Part II11m
Leveraged Buyout (LBO) Modeling Part I8m
Leveraged Buyout (LBO) Modeling Part II16m
Financing R&D Investments8m
Risk Management for R&D Projects10m
Nona Inc.28m
4-11: Module 4 Review2m
Assignment 2 Overview1m
Assignment 2 Discussion16m
2 readings
Module 4 Overview10m
Module 4 Readings10m
4 practice exercises
Practice Quiz 130m
Practice Quiz 230m
Practice Quiz 330m
Module 4 Quiz30m
29 minutes to complete
Course Conclusion
You will find out where to go next after completing this course and be able to share any thoughts you have on this course experience.
29 minutes to complete
2 videos (Total 19 min), 1 reading
1 reading
Congratulations!10m
Reviews
TOP REVIEWS FROM CORPORATE FINANCE II: FINANCING INVESTMENTS AND MANAGING RISK
by ROMar 1, 2019
Excellent material to drive and support the discussions introduced in the live sessions. Some materials may need a review (particularly wording), but it does not compromise the overall content at all.
by DBJun 26, 2019
I didn't realise how much I'd learn in this course. So many concepts I've touched on before and thought I knew a bit about, but in hindsight I really didn't understand, until I completed this course.
by AAJan 10, 2020
Excellent course that gives excellent knowledge and directions to move in the industry. Professor makes materials easy understandable and gives his advice, that can be implemented in the future.
by FRJun 13, 2020
Professor Heitor Almeida makes this course practical by using real world simplified data. The examples helped me to comprehend the concepts and get a deep understanding of corporate finance
About the Financial Management Specialization
This Specialization covers the fundamentals of strategic financial management, including financial accounting, investments, and corporate finance. You will learn to evaluate major strategic corporate and investment decisions and to understand capital markets and institutions from a financial perspective, and you will develop an integrated framework for value-based financial management and individual financial decision-making.
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