Introduction

Finance is the bedrock of the profit-making organization! This course develops the “architecture and science” of optimal strategic decision-making by building upon the basic corporate financial theory to cases of financial policies like initial public offering, debt issuance, seasoned equity offers. This course analyzes investments decisions like merger and acquisition, and divestitures decisions like spinoffs and carve-outs. corporate bankruptcy and restructuring, and other advanced models of corporate valuation. The classes are structured to maximize the synergy between advanced topics in corporate finance theory and case-based practical applications, providing students with portable, durable and marketable tools for their careers. This class is suitable for students looking to make executive strategic financial decisions, including investment bankers, consultants, CFOs and corporate treasurers, portfolio and investment managers,and students seeking careers in private equity.

Prerequisites: FIN 638: Corporate Finance, AND FIN 616: Managerial Economics, OR FIN 510:Financial Statement Analysis, OR FIN 628: Derivatives Or by instructor’s consent

Course Objective

The more advanced tools and deeper understanding of the valuation process in this course serve the same goal stated in the introductory corporate finance – to improve corporate financial decision-making by executives and to provide value-creating tools of analysis for investors. For example,

1. The course introduces more advanced concepts into valuation (such as corporate securities beyond simple debt and equity) to equip students with the tools necessary to analyze more complex (and therefore, more realistic) capital structures and corporate transactions.
2. The course incorporates richer institutional detail into quantitative analysis, bringing students closer to real world.
3. The course explores new topics and recent developments in corporate finance theory and practice as a means of exposing students to the ever-changing nature of the capital markets, both its terms and its practices.

Course Outcomes

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

1. Evaluate the theoretical and applied research in the areas of mergers & acquisitions, public offerings, corporate carve-outs, and spinoffs
2. Understand the implications of corporate bankruptcy and restructuring on stakeholders’ wealth
3. Compare various models of investment/divestiture decisions making under uncertainty
4. Identify legal aspects of corporate investments/divestiture decisions and the implications of legal risk on stakeholders’ wealth
5. Utilize ethical frameworks to analyze organizational decision-making as it relates to finance

Textbook

• Corporate Finance The Core by Jonathan Berk & Peter DeMarzo,4th Edition
• Corporate Finance by Stephen A. Ross, Randolph W. Westerfield, Jeffrey Jaffe (RWJ). Book is published by McGraw-Hill College, 10th Edition.

Grading Policies