This study session provides an introduction to corporate governance and investing and financing decisions. An overview of corporate governance is presented along with a framework for understanding and analyzing corporate governance and stakeholder management. The growing impact of environmental and social considerations in investing is also highlighted. Capital budgeting and the assessment of capital investments are covered next. The session ends with practical techniques to estimate a company’s or project’s cost of capital.

This study session covers how companies make use of leverage and manage their working capital to meet short-term operational needs. The various types of leverage (operating, financial, total), measures of leverage, and how leverage affects a company’s earnings and financial ratios are examined. A discussion then follows on the different types of working capital and the management issues associated with each. The session concludes with techniques for assessing the effectiveness of working capital management.