This course builds on the material covered in Financial Management I. The main objective of this course is to gain understanding of the theory and practice of financial decision making, especially as it concerns the financing and capital structure decisions. In this course you will build a solid understanding of: i) the trade-off between risk and return and the role of capital markets in determining the cost of capital; and ii) firms’ financing and capital structure choices and the effects of these choices on cost of capital, project value, and firm value. After taking this course you should understand the main financial decisions facing the firm, how these decisions are related, and the tools that financial management offers in order to help evaluate these decisions.
Financial Management 1 & Financial Management 2 are prerequisite courses for any other finance elective in the curriculum.
Prerequisites: BFIN 2409 Financial Management 1.