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Web Casts: Corporate Finance - Spring 2017

 


The 26-session corporate finance class will be webcast starting January 30, 2017, 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 .
I1Lecture note packet 1: Management Objectives and Investment Analysis (Sessions 1-15): The link is to a pdf file which is good for tablets or iPads. If you want to print the file, download the powerpoint file. You can then choose to print the slides, one to a page, two or a page, in note format or whatever your heart desires. Updated for Spring 2017 class.
i2Lecture note packet 2: Capital Structure, Dividend Policy and Valuation (Sessions 16-26): The link is to a pdf file which is good for tablets or iPads. If you want to print the file. download the powerpoint file. You can then choose to print the slides, one to a page, two or a page, in note format or whatever your heart desires. Updated for Spring 2017 class.

Webcasts
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 four ways:

  1. 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)
  2. 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)
  3. Audio podcast (The .mp3 file will be downloaded as an audio file and can be played on any audio player)
  4. YouTube videos (if you have slower internet connection and/or a small device).

Options for following class

You can follow this class in other forums. One is YouTube, where I have created a playlist for the class. The other is iTunes U, where you can watch the webcasts and follow the class on your tablet or even smartphone.

  1. YouTube: If you want to see the YouTube playlist, here is the link.
  2. Apple iTunes U: If you would like to watch the sessions on Apple iTunes U on your Apple device, try this link.

Finally, you can read the emails that I send to the class by this link,as well as the newsletters for the class.

Session (Click here) Topics covered Lecture notes
A Preview of the class
Corporate Finance: An Introduction
 

1 (1/30/17)

  1. Webcast, streamed (need a good internet connection)
  2. Video podcast (downloadable)
  3. Audio Podcast (downloadable)
  4. YouTube video
This is corporate finance!
Themes for class
Class Structure
  1. Syllabus for class
  2. Project Description
Post-class test and solution
Corporate Finance Puzzle #1

Corporate Governance, Family Group Style

  1. The Tata Group - The Official History
  2. The Tata Group -The Crisis
  3. My Blog Post on the Tata Group
  4. Tata's Challenges in finding a new head
  5. Crisis ended? A New Group Chair emerges

The set up & questions

2 (2/1/17)

  1. Webcast, streamed (need a good internet connection)
  2. Video podcast (downloadable)
  3. Audio Podcast (downloadable)
  4. YouTube video
More on class introduction/Project
The objective in running a business
- Value maximization versus Stock price maximization
- The "utopian" world of price maximization
- The real world intrudes

  1. Project Description
  2. Lecture note packet 1: Pages 1-19
Post-class test and solution
In Practice Webcast #1
Collecting Data
  1. Webcast
  2. SEC website
  3. SEC Live
  4. FRED (Federal Reserve)

3 (2/6/17)

  1. Webcast, streamed (need a good internet connection)
  2. Video podcast (downloadable)
  3. Audio Podcast (downloadable)
  4. YouTube video

 

Corporate Governance (Continued)
-More on corporate governance
- Lenders versus Stockholders
- Incomplete information & irrational markets
- Social Costs & Benefits

  1. Lecture note packet 1: 20-44
Post-class test and solution
Corporate Finance Puzzle #2

Dual Class Shares: I want your money, but not your input!

  1. Google's IPO and Prospectus
  2. Google & Facebook issue a third class of shares
  3. Snap's IPO plans
  4. Investor Group seeks halt to dual class shares
  1. The set up & questions
  2. NYU Classes Forum

4 (2/8/17)

  1. Webcast, streamed (need a good internet connection)
  2. Video podcast (downloadable)
  3. Audio Podcast (downloadable)
  4. YouTube video

 

Alternatives to stock price maximization
The strongest argument for price maximization
Defining risk and first steps in risk & return
  1. Lecture note packet 1: 45-76
  2. Add On Slides
Post-class test and solution
In Practice Webcast #2
Assessing corporate governance Webcast
Presentation
HP Annual Report
HP DEF14A
In Practice Webcast #3
Analyzing the stockholder base
  1. Webcast
  2. Presentation
  3. Activist Investing Newsletter
  4. An updated listing of activist investors

5 (2/13/17)

  1. Webcast, streamed (need a good internet connection)
  2. Video podcast (downloadable)
  3. Audio Podcast (downloadable)
  4. YouTube video

 

 

Risk and Return: Next steps
- The CAPM
- Alternatives to the CAPM
- Inputs to the CAPM: The riskfree rate
Lecture Note packet 1: 77-98
Post-class test and solution
Corporate Finance Puzzle #3

To diversify or not to diversify?

  1. The Case for Diversification (Markowitz)
  2. The Case for Concentration
  3. The Behavioral Evidence on Investor Behavior
  4. My blog post on whether to diversify

The set up & questions

6 (2/15/17)

  1. Webcast, streamed (need a good internet connection)
  2. Video podcast (downloadable)
  3. Audio Podcast (downloadable)
  4. YouTube video



Risk free Rates - Closure
Equity Risk Premiums
- The basis
- Estimation procedures
- Historical versus Implied Premiums
- Country risk premiums
- Company ERP
Lecture Note packet 1: 99-121
Post-class test and solution
In Practice Webcast 4a

Estimating a risk free rate

  1. Webcast
  2. Presentation
  3. Moody's ratings (3/13)
  4. CDS spreads (3/13)
In Practice Webcast #4b
Estimate a company's equity risk premium
  1. Webcast
  2. Presentation
  3. ERP & GDP spreadsheet
Corporate Finance Puzzle #4

How risk averse are you?

  1. As stocks gyrate, it is time to measure your risk tolerance.
  2. Measuring your risk aversion

The set up & questions

7 (2/22/17)

  1. Webcast, streamed (need a good internet connection)
  2. Video podcast (downloadable)
  3. Audio Podcast (downloadable)
  4. YouTube video

 

Betas
- Return Regression
- Performance and risk assessment
Bloomberg Betas
- Index choices
- Variations across service estimates
  1. Packet 1: 122-137
  2. Bloomberg Data Guide
Post-class test and solution
In Practice Webcast #5
Deconstructing a regression beta page
  1. Webcast
  2. Bloomberg beta page
  3. Spreadsheet for analysis
  4. Disney Annual Report (2012)
  5. Excel regression beta page
  6. Disney (Raw Data)
  7. S&P (Raw Data)

8 (2/27/17)

  1. Webcast, streamed (need a good internet connection)
  2. Video podcast (downloadable)
  3. Audio Podcast (downloadable)
  4. YouTube video

 

From Beta to Expected Return
Determinants of beta
- Nature of products/services
- Operating leverage
- Financial leverage
Betas as weighted averages
- Acquisiton effects on beta
Packet 1: Pages 138-153
Post-class test and solution
Corporate Finance Puzzle #5

What's in a beta?

  1. Valeant's Beta
  2. GoPro's Beta

The set up & questions

Quiz 1: Review Session (Recorded from Spring 2016, Sorry!)

  1. Webcast, streamed (need a good internet connection)
  2. Video podcast (downloadable)
  3. Audio Podcast (downloadable)
  4. YouTube video

 


Review session for quiz 1
  1. Presentation
  2. Past Quiz 1s
  3. Solutions to past Quiz 1s

9 (3/1/17)

  1. Webcast, streamed (need a good internet connection)
  2. Video podcast (downloadable)
  3. Audio Podcast (downloadable)
  4. YouTube video

 


Bottom Up Betas
- Getting pure play betas
- Estimating divisional values
- Betas and costs of equity by business
- Converting costs of equity from one currency to another
Packet 1: Pages 154-173
Post-class test and solution

In Practice Webcast #5a

 

Estimating a bottom up beta
  1. Webcast
  2. United Technologies 10K
  3. Spreadsheet for bottom up beta

10 (3/6/17)

  1. Webcast, streamed (need a good internet connection)
  2. Video podcast (downloadable)
  3. Audio Podcast (downloadable)
  4. YouTube video

 

 

Take the first quiz (a or b) and check out the solution (a or b)as well as the distribution of grades for the class. Packet 1: 174-183

Debt
- What is debt?
- Cost of debt

Post-class test and solution
Corporate Finance Case (due March 29 @10.30 am)

Home Depot Furniture

  1. The HD Furniture Case (the narrative)
  2. Furniture company data (Excel spreadsheet)
  1. Presentation
  2. My solution

Will be posted after 3/29/17)

Corporate Finance Puzzle #6

Sector Risk

  1. Short term performance of sectors
  2. Long term performance of sectors
The set up & questions

11 (3/8/17))

  1. Webcast, streamed (need a good internet connection)
  2. Video podcast (downloadable)
  3. Audio Podcast (downloadable)
  4. YouTube video

 

Cost of Capital (continued)
- Market values for debt and equity
- Lease committments to Debt
- Weights for debt and equity
Introduction to Investment returns
- Earnings vs Cash flows

  1. Yankee infield
  2. Packet 1: 184-213
Post-class test and solution
In Practice Webcast #6
Debt and the cost of debt

Webcast
Home Depot 10K
Home Depot 10Q
S&P rating for HD
Spreadsheet

12 (3/20/17)

  1. Webcast, streamed (need a good internet connection)
  2. Video podcast (downloadable)
  3. Audio Podcast (downloadable)
  4. YouTube video

 

Measuring investment returns
- Hurdle rates for projects
- Earnings to cash flows
- Incremental cash flows
- Time Weighting Incremental cash flows (NPV & IRR)
Packet 1: 211-233
Post-class test and solution
Corporate Finance Puzzle #7

Sunk Costs: Theory and Reality

  1. The sunk cost fallacy
  2. My blog post on the Yankees' A Rod Problem & sunk costs
  1. The set-up and questions

13 (3/22/17)

  1. Webcast, streamed (need a good internet connection)
  2. Video podcast (downloadable)
  3. Audio Podcast (downloadable)
  4. YouTube video

 

 

NPV and IRR
Dealing with uncertainty
Equity Analysis
To hedge or not to hedge?
Packet 1: 233-264
Post-class test and solution
In Practice Webcast #7
Estimating ROIC and ROE Webcast
Walmart 10K (2013)
Walmart 10K (2012)
Spreadsheet

14 (3/27/17)

  1. Webcast, streamed (need a good internet connection)
  2. Video podcast (downloadable)
  3. Audio Podcast (downloadable)
  4. YouTube video


Acquisition as a Project
NPV versus IRR
- Multiple IRR
- Different scale
- Reinvestment rate assumptions
Projects with different lives
Side Costs and Side Benefits

Packet 1: 265-303
Post-class test and solution
Corporate Finance Puzzle #8

Sector Risk

  1. Chevron's bet on gas does not pay off
  2. Oil and gas prices from 2009-2016
The set up & questions

15 (3/29/17)

  1. Webcast, streamed (need a good internet connection)
  2. Video podcast (downloadable)
  3. Audio Podcast (downloadable)
  4. YouTube video

 

 

Home Depot Furniture
- Case Discussion
Side Benefits & Synergies
Options in projects
Assessing existing projects

  1. HD Furniture
    - Presentation
    - Excel spreadsheet
  2. Packet 1: 304- End
Post-class test and solution