ECON 454 - Economics of Corporations

Credits: 4

This course focuses on the economic foundations and practice of financial decision making and valuation techniques, as practiced within contemporary corporations, under conditions of imperfect markets and uncertainty. Select topics include an introduction to the concept of arbitrage that underlines the fundamental principles of valuation, how cost-benefit analysis is utilized in corporate decision making to minimize the cost of capital and evaluate capital investment projects, capital structure, payout options, and basics of business valuation. Students will also be introduced to the basics of financial statement analysis used to assess the financial performance of firms. The course will make use of Excel spreadsheet for the modeling of some basic economic relationships applied to corporate decision-making and valuation. Prerequisites: ECON 360, College-level Statistics, and College-level Calculus (MATH 220 or 224/225). 4 Cr.