Introduction

Today’s dynamic work environment requires leaders who can consistently innovate, make data- driven decisions, and inspire others to perform. Whether you are interested in policy or management, learn ways to spark change wherever you go. This course is designed to help you recognize potential threats and opportunities impacting your organizations and use these insights to create and implement successful financial strategies. This introductory, graduate-level course will provide a market-oriented framework for analyzing the major types of financial decisions made by corporations. You will learn to:

• Develop a strategic short-term plan for your organization and optimize capital management
• Gain knowledge of long-term financing and valuing equities, capital cost, and structure
• Recognize the time-value of money, risk, and reward
• Understand the decision-making process for raising and allocating capital

We focus on two basic decisions: the investment decision, (to what projects should funds be allocated), and the financing decision, (where should the funds be obtained). As the course progresses we will cover such topics as: discounted cash flow valuation, bond valuation, stock valuation, cost of capital determination and the decision criteria to apply to project evaluation.

Prerequisite: Financial Decision Making (FIN 515), Financial Statement Analysis (FIN 510), and Managerial Economics (FIN 616) or equivalent courses. If you do not meet the prerequisites, please be aware you will be at a significant disadvantage and will have to work much harder to complete the course in a satisfactory manner.

Course Outcomes

After successfully completing this course in basic Corporate Finance, the student should have improved competencies in the following areas of:

1. Understand an organization’s four principal activities: conducting operations, establishing goals and strategies, making investments, and obtaining financing.
2. Understand the purpose and content of the three principal financial statements that organizations prepare to measure and report on the results of their business transactions: balance sheet statement, cash flow statement, and income statement.
3. Have basic idea about financial decision-making, equity & debt markets debt, mergers and acquisitions, and corporate restructuring.

Textbook

• Required: Corporate Finance by Jonathan Berk & Peter DeMarzo, 6th Edition. Note that Corporate Finance: The Core by the same authors is a different book!
• Recommended: Corporate Finance MyLab Access. Provides practice problems.
• Recommended: Valuation and Common Sense, Pablo Fernandez - https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2209089 (free resource).
• Reference: Corporate Finance: Theory and Practice by Aswath Damodaran. Book is published by Wiley, 2nd Edition.
• Required software: MS Excel

Recommended Study Materials

• Wall Street Journal and/or Financial Times
• Bloomberg (terminals available in Babbio)
• Yahoo Finance and/or MarketScreener
• Aswath Damodaran website: https://pages.stern.nyu.edu/~adamodar/

Grading Policies

I will assign about 10 weekly online quizzes to cover the textbook referenced for our classes, starting in Week 2. This will account for 15% of the course grade.

There will be three to four 15 minute in-class quizzes which will account for 5% of your course grade (the lowest quiz score will be dropped). I will announce these quizzes one lecture in advance.

I will post 4-5 homework assignments. Each homework will consist of 5-10 problems. All homework will be graded, and I will post detailed solutions after the due date. Homework assignments account for 20% of the course grade and will be graded mainly based on perceived effort. Late homework submissions will incur a 20% penalty. You are welcome to discuss the problems with other students, but if you copy someone else’s work this will be detected, and you will be penalized. Also, the use of ChatGPT and similar AI solutions for specifically solving homework assignments is prohibited.

The group project assignment accounts for 20% of the course grade. Details on the group project will be provided at the start of the semester.

The final exam is worth 25% of the course grade and will be focused on larger, multi-part corporate problems to be solved.The final exam covers all the course materials.

Attendance, interaction, and aptitude (i.e., class participation) will account for 15% of the course grade. Please make sure that you come to class and participate in class discussions.
To be eligible to receive a final grade in this course, you must take the final exam and submit the group project by the due date. There is no makeup for the final exam.

NOTE: I reserve the right to change any aspect at any time, including, but not limited to assignments, grading methods or relative grading weights, assignment or exam dates, or the course schedule. However, the final exam may not be rescheduled.

		Weights
1	Class Participation	15%
2	Weekly Online Quizzes	15%
3	In-Class Quizzes	5%
4	Homework Assignments	20%
5	Group Project	20%
6	Final Exam	25%

Exams
The final exam is open-book and online (computer based) with submission in the form of an Excel file. It is to be performed individually and without the use of ChatGPT or other artificial intelligence tools.

Canvas will be used as a course management tool. You should be automatically enrolled in Canvas if you have registered on time. Class announcements and other relevant course materials will be posted here.