This course builds on Financial Management 1 and develops an asset pricing framework used in corporate finance based on the trade-off between risk and return. We use modern portfolio theory to determine a suitable asset pricing model and arrive at determining the relevant discount rate to reflect the risk associated with the cash flow we focused on in Financial Management 1. Finally, we will address how financing and capital structure choices affect project and firm value using the above techniques and methods. The course will conclude with three valuation methods: WACC, APV, and FTE and an extensive case discussion. Financial Management 1 & Financial Management 2 are prerequisite courses for any other finance elective in the curriculum. Prerequisites: BFIN 2409 Financial Management 1.