Finance 620: A Deep Dive into Corporate Finance at OSU
Finance 620, more formally known as Corporate Finance, is a core course within The Ohio State University’s Fisher College of Business MBA program. It serves as a foundational building block for understanding the intricacies of financial decision-making within organizations. The course delves into the theory and application of key concepts that are crucial for aspiring finance professionals and general managers alike. The primary objective of Finance 620 is to equip students with the analytical tools and frameworks necessary to evaluate investment opportunities, manage financial risk, and optimize a firm’s capital structure. Students learn to think critically about how financial decisions impact shareholder value and contribute to the overall strategic goals of a company. A significant portion of the course is dedicated to capital budgeting techniques. Students learn how to evaluate potential projects using various methods, including net present value (NPV), internal rate of return (IRR), and payback period. The course emphasizes the importance of considering the time value of money and incorporating risk into investment decisions. Students are taught how to analyze cash flows, estimate discount rates, and sensitivity analysis to make informed investment recommendations. Beyond capital budgeting, Finance 620 also explores the firm’s capital structure decision. The course examines the trade-offs involved in using debt versus equity financing, considering factors such as tax implications, financial distress costs, and agency problems. Students delve into theories such as the Modigliani-Miller theorem and the pecking order theory to understand the optimal capital structure for different types of firms. Further, the course typically covers dividend policy, exploring how firms should determine the appropriate level of dividends to pay out to shareholders, balancing current income needs with future investment opportunities. Risk management is another critical component of Finance 620. The course introduces students to various types of financial risk, including market risk, credit risk, and operational risk. Students learn about different risk management techniques, such as hedging and diversification, and how to implement these strategies to protect the firm’s assets and earnings. The course typically incorporates a mix of lectures, case studies, and problem sets. Case studies are an integral part of the learning experience, allowing students to apply the concepts learned in class to real-world business scenarios. Through analyzing these cases, students develop critical thinking skills and learn how to communicate their recommendations effectively. Group work is common, encouraging collaboration and the sharing of diverse perspectives. Successful completion of Finance 620 provides students with a solid foundation for further studies in finance and related fields. The knowledge and skills gained in this course are highly valued by employers in a wide range of industries, including investment banking, corporate finance, and consulting. Graduates armed with the knowledge from Finance 620 are well-prepared to make strategic financial decisions that drive value creation and contribute to the long-term success of their organizations. The course serves as a cornerstone in the Fisher MBA program, contributing to the development of well-rounded and insightful business leaders.