Financing and Capital Structure

Dates & Announcements
Course dates Thursdays, 20.09. - 13.12.2018
13:15h - 16:00h
Main Building H4, room 201

First examination date:
20.12.2018, 13:15h - 15:15h
Main Building H4, room 201
Exam inspection: see Ilias

(Relevant are only the specifications available on KSL)

Second examination date:
07.02.2018, 09:45h - 11:45h

Main Building H4, room 201
Exam inspection: see Ilias

(Relevant are only the specifications available on KSL)

Allowed is a calculator and an A4 cheat sheet (written on both pages / hand- or computer-written)

Downloads All course material is provided on ILIAS.
Course page Details on KSL


General information about the course
Course description

This course introduces students to a number of advanced topics in corporate finance, such as the design of corporate securities, the issuing process of these securities, the capital structure of firms, and the implications of financial structuring for the value of firms. It presents a market oriented-framework for analyzing firms’ financing and capital structure choices. Throughout the course, students will solve exercises and a case study to enhance the understanding of the covered topics.

Learning outcomes and skills developed
  • Students know the most important internal and external financing instruments. They understand their characteristics and can describe their pros and cons.
  • Students know the reasons why firms raise equity capital and the instruments to do so. They also know about the different ways of paying funds back to shareholders, including the tax consequences thereof.
  • Students understand the components of the cost of debt capital. Furthermore, they are able to derive such costs using standard concepts and real-live market data.
  • Students understand the Modigliani-Miller theorem with respect to financing decisions and firm value, and understand the underlying assumptions and implications. Students further understand the effects of leverage on the value of a firm if the theoretical assumptions are relaxed and real-world frictions are introduced – such as taxes, incentive effects, agency costs and costs of financial distress. This understanding is applied to discuss and determine the optimal capital structure of a company.
  • Students are required to apply their acquired knowledge and insights on simple examples and on a real-world case study.
  • Students can describe how firms’ capital structure choices are affected by market imperfections such as taxes and bankruptcy costs.
  • Students are able to work in a team to co-ordinate and develop ideas how to solve specific problems related to the firms’ investment decisions and valuation of corporate securities.

Soft skills developed:

  • Plan and carry out activities in a way that makes optimal use of available time and other resources.
  • Communicate effectively, being understood, including across different languages and cultures.
  • Negotiate effectively within the group.
Credits, Cycle 6 ECTS / 4 hours per week, lecture cycle
Degree M Sc
Language English
Lecturer Philip Valta

Marc Brunner

Jan Pichler

Prerequisites Einführung Finanzmanagement und Rechnungswesen, Valuation
Exam Please use KSL to register for the final exam.
You need to register for each examination date separately.
Material (tent.) Calculator, cheat sheet (A4, duplex, hand- or computer-written).