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Web Casts: Corporate Finance - Spring 2012

The 26-session corporate finance class will be webcast starting January 30, 2012, and the lectures will be available as webcasts that can either be watched online or downloaded. You can get the supporting lecture notes by clicking on the pdf files below - the pages covered by each lecture are provided next to each lecture. The quality of the video is not great but the audio should be good. You can download the lecture notes that I will be using for the classes below. For the syllabus and other details, visit the home page for this class .
Lecture note packet 1: Management Objectives and Investment Analysis (Sessions 1-15: Download pdf file. You can also get two slides per page, if you want to save paper.) Updated for Spring 2012 class
Lecture note packet 2: Capital Structure, Dividend Policy and Valuation (Sessions 16-26: Download pdf file). You can also get two slides per page, if you want to save paper.) Updated yet for Spring 2012 class

PLEASE NOTE: A GLITCH IN THE SYSTEM LAST WEEK (AROUND JANUARY 23, 2013) HAS CAUSED A PASSWORD REQUEST TO POP UP. I AM WORKING ON GETTING THAT FIXED AND IT SHOULD BE BY NEXT WEEK. IN THE MEANTIME, YOU CAN ACCESS THE WEBCASTS OF THE CLASSES BY GOING TO:
LORE: http://v1.lore.com/b40.2302.damodaran (Use this code: GW6Y6K)

This page will include the webcasts from the current class. This page will include the webcasts from the current class. The webcasts can be accessed in one of three ways:
Streaming video (The file will be streamed to your computer. This will work only if you have a good internet connection, but should be of the best quality)
Video podcast (The .m4v file will be downloaded to your computer and you can watch the video using Quicktime or video software or on your iPod)
Audio podcast (The .mp3 file will be downloaded as an audio file and can be played on any audio player)

The prior semester's webcasts can be found here.
If you want to join the Coursekit page for this class (or just lurk), here is the link.

Session (Click here) Topics covered Lecture notes

1 (1/30/12)

Webcast, streamed (need a good internet connection) FAILED
Video podcast (downloadable) FAILED
Audio Podcast (downloadable)

This is corporate finance!
Overview of class

Syllabus for class
Project Description

2 (2/1/12)

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

Project description

The objective in corporate finance
- Firm value vs Equity value vs Stock price
- The utopian world of traditional corporate finance
- The real world

Packet 1: 1-19

3 (2/6/12)

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

Stockholder interests vs Managerial interests
Information and Market Inefficiencies
Social Responsibilty in Decision Making
Packet 1: 20- 47

4 (2/8/12)

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

Alternatives to Stock Price Maximization
The Case for Stock Price Maximzation restated
First steps in Risk
Holdings assessement
Packet 1: 47-69

5 (2/13/12)

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

The CAPM
Alternatives to CAPM

Risk Breakdown: Test
Packet 1: 70-86

6 (2/15/12)

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

Using the CAPM
- The Riskfree Rate
- Risk Premiums

Riskfree rates: Test
Packet 1: 86-113

7 (2/22/12)

Webcasts for the class had technical failure but I made a webcast in my office that recreated the class.
Recreated webcast (downloadable)

Betas
- The Regression Beta
- Service Betas
- Expected Returns
Country risk premiums
Packet 1: 114-133

8 (2/27/12)

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

Closing thoughts on regression betas
Fundamental determinants of betas
Betas as weighted averages
- Beta after a merger
- Bottom up beta introduction
Updated beta page for Disney
Packet 1: 134-156

9 (2/29/12)

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

Mechanics of bottom up beta estimation
- Betas by business
- Correcting for cash
Total Betas
Packet 1: 157-173

Quiz 1: Review Session (3/3/11)

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

Review for quiz 1: Covers sessions 1-9 Quiz 1 Review Material

10 (3/5/12)

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

Take the quiz(a or b), check the solution (a or b) and compare your score to the distribution

Packet 1: 174-183
Defining debt
The cost of debt

11 (3/7/12)

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

Hybrid Securities
Weights for debt and equity
Cost of capital
Measuring Investment returns: The case for cash flow
Packet 1: 184-206

12 (3/19/12)

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

Measuring returns
- Accounting returns
- From earnings to cash flows
- From cash flows to incremental cash flows

Packet 1: 207-228

13 (3/21/12)

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

Time weighting cash flows: NPV and IRR
Dealing with uncertainty
Equity versus Firm Analysis
Packet 1: 229-256

14 (3/26/12)

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

More on equity vs firm analysis
An acquisition as a capital budgeting project
Project interactions
- Mutually exclusive projects
- Projects with different lives
Packet 1: 257-295

15 (3/28/12)

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

The Case
Project side costs
- Opportunity costs
- Product cannibalization
Project side benefits
Options in projects (to delay, expand and abandon)
Nike Case presentation
Nike finite case
Nike perpetual life
Packet 1: 296-314

16 (4/2/12)

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

Project choices for existing projects
The financing decision
- Debt versus Equity
- The life cycle view of debt and equity
- The trade off

Packet 1: 315-End
Packet 2: 1-20

Quiz 2: Review Session (3/3/11)

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

Review for quiz 1: Covers sessions 1-9 Quiz 2 Review Material

17 (4/4/12)

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

Take the quiz(a or b), check the solution (a or b) and compare your score to the distribution Packet 2: 21-37
More on the debt trade off
The Miller Modigliani Theorem
The Financing Heirarchy
First steps in the optimal financing mix analysis

18 (4/9/12)

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

Cost of capital as optimizing tool
- Steps in process
- Mechanics
Enhanced cost of capital approach
Packet 2: 38-72

19 (4/11/12)

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

The determinants of the optimal debt ratio
APV approach
Relative to sector and market
Following up the optimal
Packet 2: 73-98

20 (4/16/12)

Due to a technical problem, the webcast stopped 26 minutes in and was picked up again 10 minutes later.
Webcast, streamed (need a good internet connection) Part 1 & Part 2
Video podcast (downloadable) Part 1 & Part 2
Audio Podcast (downloadable) Part 1 & Part 2

Designing the "perfect" debt
- The basic idea: Debt that behaves like equity
- The steps in designing the perfect bond
- Approaches for debt design
Packet 2: 99-136

21 (4/18/12)

Another technical problem (this is getting old). First 10 minutes has no audio.

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

The Dividend Principle
- Facts about dividend policy
- The life cycle view of dividends
- Three Schools of Thought on Dividends
Packet 2: 137-158

22 (4/23/12)

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

Bad reasons for paying dividends
Good reasons for paying dividends
Assessing dividend policy: First steps
Packet 2: 159-189

Quiz 3: Review Session (3/3/11)

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

Review for quiz 3: Covers sessions 16-21 Quiz 3 Review Material

23 (4/25/12)

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

Take the quiz(a or b), check the solution (a or b) and compare your score to the distribution Packet 2: 190-201
Dividend Assessment: FCFE vs Dividends
Trust and Dividends

24 (4/30/12)

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

Dividend Assessment (continued)
Valuation
- Equity versus Firm Valuation
- Estimating cash flows
- Estimating discount rates
- Estimating growth rates

Packet 2: 202-236

25 (5/2/12)

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

Valuation (continued)
- Estimating terminal value
- From operating asset to equity value
- Value and Corporate Finance
Packet 2: 237-End

26 (5/7/12)

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

Reviewing the class, using the project as the base.

Final presentation

Summary of summaries

Quiz 3: Review Session (3/3/11)

Webcast, streamed (need a good internet connection)
Video podcast (downloadable)
Audio Podcast (downloadable)

Review for final exam: Cumulative Final Review Material
The Final Exam Take the final (a or b), check the solution (a or b) and compare your score to the distribution