Corporate Finance

Corporate finance studies the financial decisions made within firms. These decisions are for the most part common to firms of any size. They involve identifying projects that the firm should invest, raising financing for these projects, and deciding how much of the firm earnings should be returned to its owners. Pursuing a career in this area requires strong skills in corporate finance and accounting, as well as very good communication skills.

Students specialized in this area can pursue the following career paths:

  1. Corporate Career: This path leads to a career as a financial manager in a corporation. Corporate financial managers deal with the above issues on a daily basis and must decide on the basis of maximizing the value of the firm. A typical starting point is that of a financial analyst within a large corporation (Boeing, GM, GE, Caterpillar, Motorola, etc.). Analysts usually go through a series of rotations of six months or more in various departments within the firm (financial reporting, treasury, strategy, etc.). The goal for someone pursuing a corporate career is to become a Chief Financial Officer (CFO), which is often an intermediate step towards becoming a Chief Executive Officer (CEO).

  2. Investment Banking Career: This is the typical area of specialization for students interested in working for an investment bank. Investment banks provide consulting services to corporate clients for Mergers & Acquisitions (M&A), raising financing (Initial Public Offerings (IPOs), bond or equity issues), and corporate strategy. Investment banks are categorized into three groups:
    1. Bulge Bracket: These are the largest banks that offer all types of services and have both a domestic and a global presence. Familiar names are: Goldman Sachs, Merrill Lynch, Morgan Stanley, Citigroup, UBS, etc.
    2. Mid-tier: These banks have a more regional or industry focus. They may specialize in specific types of transactions, such as mid-cap firms. Familiar names are AG Edwards, DLJ, etc.
    3. Boutique: These are smaller investment banks that are very specialized. They may be the best in specific areas of investment banking, for example small-size M&As, or specialize in one or two industries. Some names are Houlihan Lokey and Cochran Caronia.

  3. Consulting Career: This path leads to employment in any consulting firm. These firms provide advice to corporations on corporate finance, accounting, and taxation issues. Familiar names are the consulting subsidiaries of the big four accounting firms, KPMG, PriceWaterhouseCoopers (PWC), Deloitte, and Ernst & Young. This path typically requires good accounting and/or IT skills.

Suggested Courses

  • Finance 521: Advanced Corporate Finance

    Addresses both the theoretical and applied aspects of firms' financing decisions; topics include capital structure and cost of capital theories; mergers, acquisitions and leveraged buyouts; options, warrants, and convertibles; venture capital and initial public offerings; and pensions.

  • Finance 522: Cases in Financial Strategy

    Course focuses on financial management cases. Provides students with an active learning experience. Case work is based on concepts learned in introductory corporate finance. Topics discussed include measuring and interpreting cash flow performance, financial forecasting and turnaround management; capital investment and cost of capital; and capital structure, dividend policy; and firm valuation.

  • Finance 524: Mergers and Acquisitions

    The primary objective of this course is to give students experience in valuing firms. While the primary focus of the course is on mergers and acquisitions, the course will also cover topics such as initial public offerings, leveraged buyouts, spin-offs, and divestitures.

  • Finance 551: International Finance

    Explores the characteristics of the international financial market and examines various aspects of corporate financial management. Topics may include international parity conditions, exchange-rate risk management, country risk, cross-border investment analysis, multi-national firm budgeting, hedging in foreign currency markets, accessing international financial markets for financing, and competitive strategy in a global marketplace.

  • Finance 580 PE: Private Equity

    Provide students with an understanding of the nature of the private equity market, the principal participants in this market, and the financial strategies that they employ; topics covered include: how private equity funds are raised, structured and financed; contracting in private equity market; valuation of private equity interests; sources of capital for private companies, strategies for value creation; and exit strategies.

  • Finance 580 TBM: Turnaround and Bankruptcy Management

    Offers an overview of issues related to workouts, turnarounds and bankruptcies; covers management issues in distressed companies such as use of financial ratios to predict distress, valuation of distressed companies, and sources of financing for distressed companies through the use of case studies, selected readings, and T&B professionals sharing their experiences and insights.

  • Finance 580 BF: Behavioral Finance

    Presents the increasing evidence that the financial decisions of at least some investors are affected by various behavioral biases that do not follow from traditional portfolio choice models; this course will highlight and analyze key findings from this research and consider implications of this observed behavior for managers of corporations, mutual funds, and human resource departments.

  • Finance 490 EQP: Equipment Leasing and Financing

    This course provides the future CFO/Decision-Maker a competitive basis to analyze all issues, decision-making techniques, industry background, accounting and economic factors as well as lessor-lessee negotiating techniques regarding equipment leasing and finance; emphasizes a “hands-on” practical understanding of equipment issues to be considered in finance decisions.

  • Accounting 517: Financial Statement Analysis

    An in-depth analysis of financial reporting from a user’s perspective, using a variety of tools to break apart financial reports into meaningful units for analysis, forecasting financial statements, and valuing a firm; supplements material covered in corporate finance and valuation course.


© Copyright 2007 Department of Finance, University of Illinois