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Webcasts

 


The 26-session corporate finance class will start on February 1, 2021, and tand the sessions will be online, though recordings will be acceible on multiple platforms. 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. 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 2021 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 2021 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 on YouTube. I have created a playlist for the class, where the sessions will be posted sequentially with links to slides and other material.

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 (2/1/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
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

Stakeholders versus Stockholders

  1. The Business Roundtable Statement on Stakeholders
  2. My blog post on stockholders versus stakeholder wealth maximization

The set up & questions

2 (2/3/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube
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 1-15
Post-class test and solution
In Practice Webcast #1
Collecting Data
  1. Webcast
  2. SEC website
  3. SEC Live
  4. FRED (Federal Reserve)

3 (2/8/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

 

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

  1. Lecture note packet 1: 16-37
Post-class test and solution
Corporate Finance Puzzle #2

Activist Investors

  1. My (old) blog post on activist investing
  2. My post on Softbank after the WeWork fiasco
  3. News story on Elliott Management targeting Softbank

The set up & questions

4 (2/10/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

 

Alternatives to stock price maximization
- Managerial Corporatism
- Confused Corporatism
- Crony Corporatism
Constrained Corporatism

  1. Lecture note packet 1: 38-64
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
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

5 (2/17/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

 

 

Market-based Solutions
Risk and Return: Next steps
- What is risk
- The CAPM
- The Marginal Investor

Lecture Note packet 1: 65-95
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)

6 (2/22/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

 

 


Risk & Return
Risk free Rates
Equity Risk Premiums
- The basis
- Estimation procedures

Lecture Note packet 1:  96 -115

 

Post-class test and solution
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 (2/24/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

 

Equity Risk Premiums
- Historical ERP
- Implied ERP
- Country ERP

Betas
- Return Regression
- Set up and Reading Output

  1. Lecture Note packet 1:  116 -140
Post-class test and solution
In Practice Webcast #4b The logic and the measurement questions behind equity risk premiums are examined in this webcast.
  1. Webcast
  2. Presentation
    Spreadsheet
  3. S&P 500 on buybacks
  4. S&P 500 earnings
In Practice Webcast #4c
Estimate a company's equity risk premium
  1. Webcast
  2. Presentation
  3. ERP & GDP spreadsheet
  4. (You can get the updated ERP & GDP numbers on my website)

8 (3/1/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

 

Beta Regressions
- Reading the regresssion
- Limitations of regression betas

  1. Lecture Note packet 1:  141-158
  2. Bloomberg Data Guide
Post-class test and solution
Corporate Finance Puzzle #5

What's in a beta?

  1. GameStop's beta

The set up & questions

9 (3/3/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

 


Determinants of Betas
Betas as weighted averages
Beta after an acquisition
Bottom Up Betas
- Getting pure play betas
- Estimating divisional values
- Betas and costs of equity by business

Lecture Note packet 1:  159-177
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)

In Practice Webcast #5a

 

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

Quiz 1: Review Session

  1. YouTube video

 


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

9 (3/8/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

Quiz 1 Lecture Note packet 1:  178-188

Bottom up Betas (continued)
- Multi Business Companies
- Private companies

Post-class test and solution

Corporate Finance Case (Due Matrch 31, before class)

 

Google GCar

  1. The Case (pdf)
  2. Fitness Companies (Excel file)
 

11 (3/10/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

 

Cost of Capital (continued)
- What is debt?
- Market values for debt and equity
- Lease committments to Debt
- Weights for debt and equity

  1. Lecture Note packet 1:  189-212
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 (3/15/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

 

Measuring investment returns
- First Principles
- Hurdle rates for projects

Lecture Note packet 1:  213-235
Post-class test and solution
Corporate Finance Puzzle #6

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 (3/17/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

 

Measuring investment returns
- Earnings to cash flows
- Incremental cash flows
- Time Weighted Incremental cash flows
- Dealing with currencies
- Dealing with uncertainty

Lecture Note packet 1:  236-263
Post-class test and solution
In Practice Webcast #7
Estimating ROIC and ROE Webcast
Walmart 10K (2013)
Walmart 10K (2012)
Spreadsheet

14 (3/22/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube


Equity Analysis
Acquisition as a Project
To hedge or not to hedge?

Lecture Note packet 1:  264-289
Post-class test and solution
Corporate Finance Puzzle #7

Sector Risk

  1. Chevron's bet on gas does not pay off
  2. Oil and gas prices from 2009-2016
The set up & questions
In Practice Webcast #8
A "typical project": what and why?
  1. Presentation
  2. Webcast

15 (3/29/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube


Investment Interactions
- Mutually Exclusive Projects
- Project Side Costs
- Project Side Benefgits

Lecture Note packet 1:  290-328
Post-class test and solution

Quiz 2: Review Session

  1. YouTube video

 


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

16 (3/31/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube


Google GCar Discussion
Project Options
Looking at past projects

  1. Google Car Presentation
  2. Google Car Solution
  3. Lecture Note packet 1:  329-End
Post-class test and solution

17 (4/5/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube


Closing up investment analysis
Debt vs Equity - Patterns
Debt vs Equity - The Trade off

Lecture Note Packet 1, pages 339-341 & Lecture Note packet 2:  1-20

Post-class test and solution
Corporate Finance Puzzle #9

The US tax code (pre 2017 tax reform)

  1. Taxes around the world (2015)
  2. The Perversity of the US tax code
  3. The Pfizer Allergan Deal
  4. The US Treasury's Bid to stop Inversions
  1. The set-up and questions

18 (4/7/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube


The Debt Trade off (contd)
The Miller Modigliani Theorem
The Financing Heirarchy
The Cost of Capital Approach

Lecture Note packet 2:  21-54
Post-class test and solution
In Practice Webcast #9
The trade off on debt versus equity
  1. Presentation
  2. Webcast
  3. Spreadsheet
  4. Marginal tax rates by country
  5. Effective tax rates by sector (US)

19 (4/12/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube


More on the Cost of Capital Approach
The Enhanced Cost of Capital Approach
Determinants of Optimal Debt Ratio

Lecture Note packet 2:  55-88
Post-class test and solution
Corporate Finance Puzzle #10

The Dark Side of Debt

  1. Valeant: My Blog Post (November 2015)
  2. Valeant spooks bondholders
  3. Valeant's debt rating may be cut
  4. Valeant: My Blog Post (March 2017)
  1. The set-up and questions

20 (4/14/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube


The APV Approach
Peer Group Assessment
Moving to the Optimal
The Perfect Debt- First Steps

Lecture Note packet 2: 89-113
Post-class test and solution
In Practice Webcast #10
The optimal debt ratio
  1. Webcast
  2. Dell 10K
  3. Dell optimal capital structure
Corporate Finance Puzzle #11

Surplus notes: The best of all worlds?
- Surplus notes: What are they?
- The IRS view of surplus notes
- The legal view of surplus notes
- The ratings agency view of surplus notes
- The insurance regulatory view of surplus notes
- The accounting (GAAP) view of surplus notes

  1. The set up and questions

21 (4/21/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

Designing the perfect financing
- Ways of finding your perfect financing
- Intutive debt matching
- Project Financing
- Fixing mismatches

Lecture Note packet 2: 114-147
Post-class test and solution

Quiz 3: Review Session

  1. YouTube video

Review session for quiz 3
  1. Presentation
  2. Past Quiz 3s
  3. Solutions to past Quiz 3s
In Practice Webcast #11
The perfect debt
- Intuitive analysis
- Macro regression
  1. Webcast
  2. Presentation
  3. Spreadsheet
  4. WMT financial summary

22 (4/26/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

Dividend Policy
- Descriptive Facts
- Three Schools of Thought
- Dividends don't matter
- Dividends are bad (because of tax disadvantage)
- Dividends are good
Bad Reasons for paying dividends


Lecture Note packet 2: 148-177
Post-class test and solution

23 (4/28/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

Good Reasons for paying dividends
Actual versus Potential Dividends
Trust in Management

Lecture Note packet 2: 177-208
Post-class test and solution
In Practice Webcast #12
The trade off on dividends (whether to pay them and/or increase them)
  1. Webcast
  2. Presentation
In Practice Webcast #13
Dividend Assessment
- Measuring Potential Dividends (FCFE)
- Judging cash return policy
  1. Webcast
  2. Presentation
  3. Spreadsheet
  4. Intel Annual Report
  5. Intel 10-year summary

Final Exam: Review Session

  1. YouTube video

Review session for final exam
  1. Presentation
  2. Past finals
  3. Solutions to past finals

24 (5/3/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

Dividend Assessment (continued)
Peer group dividend policy
Valuation 101
- The Big Questions
- Stories and Numbers

Lecture Note packet 2: 209-232
Post-class test and solution

25 (5/5/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

Valuation
- Cash Flows
- Discount Rates
- Growth and Terminal Value

Lecture Note packet 2: 233-255
Post-class test and solution

26 (5/10/21)

  1. Recorded Zoom session (accessible only those in the class)
  2. Video podcast (downloadable)
  3. Audio podcast (downloadable)
  4. YouTube

 

Closing presentation
- A big picture review
- Project findings
  1. Closing presentation
  2. Project summaries