FIN 638 Corporate Finance
Course Catalog Description
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 manage- ment, 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 provides students corporate finance 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: The prerequisite for your class are Financial and Managerial Accounting (FIN 600), Financial Statement Analysis (FIN 510), and Economics for Managers (MGT 606) or equivalent courses.
Dr. Suman Banerjee
||firstname.lastname@example.org||By Appointment (Email)|
After successfully completing this course in fixed income asset valuation, the student should have improved competencies in the following areas of:
- Creative and Critical Thinking
- Look at the financing of an organization and determine if what they are following the “best” practices.
- Determine alternate methods of enhancing “shareholder wealth.”
- Creation of Value
- Keeping the primary objective (shareholders’ wealth maximization) clear, how can the firm add value to other stakeholders like debtholders, suppliers and customers?
- Field Specific Knowledge and Experience
- Look at the traditional methods of how firms determine the way they finance themselves and apply concepts learned from this course to make changes to the status quo.
- Some Statistical Data Analysis and Computer Skill
- The ability to take interest rate-related data and process through statistical procedures using MS Excel and take the results and communicate those results in a understandable way using MS Words.
- Ethical & Professional Judgment
- Utilize ethical frameworks to analyze organizational decision-making as it relates to finance.
- Required: Corporate Finance The Core by Jonathan Berk & Peter DeMarzo, 4th Edition.
- Reference: Corporate Finance by Stephen A. Ross, Randolph W. Westerfield, Jeffrey Jaffe. Book is published by Mcgraw-Hill College, 10th Edition.
- Reference: Corporate Finance: Theory and Practice by Aswath Damodaran. Book is published by Wiley, 2nd Edition.
There will be three (3) 20 minutes in-class quizzes. Two (2) best quiz scores out of the possible three will count and will account for 10% of your final course grade. I will announce these quizzes only one lecture in advance. There is one in-class midterm exam. The midterm exam is worth 15% of the class grade. I will provide more information on the content of these exams close to the actual dates. Also, there is a final exam. Final exam is worth 20% of the class grade. I will post three/four homework assignments. Each homework will consist of a few problems. All homework will be graded and I post detailed solution after the due date. Homework assignments account for 10% of the final grade and graded mainly on perceived effort. The group project assignment accounts for 30% of the final grade. Attendance, interaction and aptitude (class participation) will account for 15% of the final grade.
In order to be eligible to receive a final grade in this course, you have to take both the exams and submit the project by the due date. Under special circumstance, I will arrange for make-up exams, but each one of you are eligible to take only one make-up. You have to go through proper channel (student services office) and provide me with documents supporting (e.g., medical certificates) your reasons for absence. I will give +/− grades for this course.
|Week 1||Introduction & Financial Statement Analysis 1(Recap)||BD Chapters 1 & 2|
|Week 2||Financial Statement Analysis 2 (Recap)||BD Chapters 1 & 2|
|Week 3||Cash Flow Valuation 1(Recap)||BD Chapters 4, 6, 7, 9|
|Week 4||Cash Flow Valuation 2(Recap)||BD Chapters 4, 6, 7, 9|
|Week 5||Portfolio Theory & Capital Asset Pricing Model(Recap)||BD Chapters 10 & 11|
|Week 6||Fundamentals of Capital Budgeting 1||BD Chapter 8|
|Week 7||Fundamentals of Capital Budgeting 2||BD Chapter 8|
|Week 8||Costs of Capital Estimation||BD Chapter 12|
|Week 9||Midterm Exam||Comprehensive|
|Week 10||Basic Capital Structure Theory||BD Chapter 14|
|Week 11||Payout Policies||BD Chapter 17|
|Week 12||Valuation and Financial Modeling: A Case Study||BD Chapter 19|
|Week 13||Fundamental Valuation: Case of Freeport McMoran 1||Special Notes|
|Week 14||Fundamental Valuation: Case of Freeport McMoran 2||Special Notes|
|Week 15||Final Exam||Comprehensive|