Corporate Finance (FIN 401)

2021 Fall
Sabancı Business School
Süreyya Burcu Avcı,
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FIN301 IE303
Formal lecture
Discussion based learning,Case Study
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Fundamental financial concepts from the perspective of financial managers/entrepreneurs are examined and practical applications within local and global contexts are discussed. This course intends to show, through discussions on complex corporate problems structured in real or hypothetical settings, how the basic concepts/theories covered in FIN 301 - Financial Management class can be applied to corporate decision-making.


The objective of the course is to teach you the general principles and tools of corporate financial management. Modern corporate finance theory addresses two main problems of any firm:

1) How should a firm determine which projects and operating strategies to pursue?
2) How should these projects and strategies be financed?

As we will see, these two issues are critically interrelated. The basic principle of corporate finance is that a firm should pursue projects and strategies that maximize firm value. Whether a particular project increases or decreases value depends on whether the return on the project is higher than its cost of capital. This cost of capital is, in turn, affected by the ways the project is financed ? debt, equity, or internal cash flow. In this course, by building on the framework developed in the Introduction to Financial Management (FIN 301) course, we will take an in-depth look at the trade-off between risk and return, re-visit the estimation of the appropriate cost of capital, investigate the capital structure decision, examine firms? long-term financing options and establish the framework to value assets with uncertain paths.


  • Upon successful completion of the course, students should be able to: 1. Determine cost of capital and the appropriate discount factor in detail, 2. Analyze alternative investments and correctly identify the value impact, 3. Explain factors behind firms' capital structure decisions,


1. Understand the world, their country, their society, as well as themselves and have awareness of ethical problems, social rights, values and responsibility to the self and to others. 4

2. Understand different disciplines from natural and social sciences to mathematics and art, and develop interdisciplinary approaches in thinking and practice. 3

3. Think critically, follow innovations and developments in science and technology, demonstrate personal and organizational entrepreneurship and engage in life-long learning in various subjects; have the ability to continue to educate him/herself. 3

4. Communicate effectively in Turkish and English by oral, written, graphical and technological means. 3

5. Take individual and team responsibility, function effectively and respectively as an individual and a member or a leader of a team; and have the skills to work effectively in multi-disciplinary teams. 3

1. Have an understanding of economics and main functional areas of management 5

2. Have a basic all-around knowledge in humanities, science, mathematics, and literature 3

3. Have a basic knowledge of law and ethics, awareness of social and ethical responsibilities 4

4. Work effectively in teams and environments characterized by people of diverse educational, social and cultural backgrounds 3

5. Demonstrate proficiency in oral and written communications in English 3

6. Pursue open minded inquiry and appreciate the importance of research as an input into management practice; thus, a.know how to access, interpret and analyze data and information by using current technologies b.use the results from analyses to make informed decisions 4

7. Use office softwares for written communication, presentation, and data analysis 3

8. Demonstrate awareness that business settings present different opportunities and challenges for managers due to environmental/contextual differences that arise in economic, political, cultural, legal-regulatory domains 3


  Percentage (%)
Final 30
Midterm 25
Assignment 25
Case Study 20



Ross, Westerfield and Jaffe (RWJ), Corporate Finance, 12th edition, McGraw Hill-Irwin.

Cases HBS Cases.