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The 26-session corporate finance class will be webcast starting February 4, 2013, 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 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 2013 class
Lecture
note packet 2: Capital Structure, Dividend Policy and Valuation
(Sessions 16-26: 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
2013 class
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)
If you want to join the Lore page for this class (or just lurk), here is
the
link.
If you would like to watch the sessions on Appe 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 |
| This is corporate finance! Overview of class |
||
| Post-class test and solution | ||
Corporate Finance Puzzle/Story of the week #1 |
Dell goes private | |
2 (2/6/13) |
The objective in running a business - Value maximization versus Stock price maximization - The "utopian" world of price maximization - The real world intrudes |
Lecture note packet 1: Pages 1-20 |
| Post-class test and solution | ||
In Practice Webcast #1 |
Assessing corporate governance | Webcast Presentation HP Annual Report HP DEF14A |
| More on the objective function - Lenders versus Stockholders - Incomplete information & irrational markets - Social costs/benefits |
Packet 1: 21-48 | |
| Post-class test and solution | ||
Corporate Finance Puzzle/Story of the week #2 |
Questions | |
| Alternatives to stock price maximization The strongest argument for price maximization Defining risk and first steps in risk & return |
Packet 1: 49-71 | |
| Post-class test and solution | ||
In Practice Webcast #2 |
Analyzing the stockholder base | Webcast Presentation |
Corporate Finance Puzzle/Story of the week #3 |
Danger and Opportunity: Google considers entry into the retail market |
Questions |
| Risk and Return: Next steps - The CAPM - Alternatives to the CAPM - Inputs to the CAPM: The riskfree rate |
Packet 1: 72-96 Risk Examples |
|
| Post-class test and solution | ||
In Practice Webcast #3 |
Estimating a Risk free rate | |
| Equity Risk Premiums - The basis - Estimation procedures - Historical versus Implied Premiums - Country risk premiums |
Packet 1: 97-118 | |
| Post-class test and solution | ||
Corporate Finance Puzzle/Story of the week #4 |
Country Risk: The Italian Elections | |
| Betas - Return Regression - Performance and risk assessment Determinants of Betas |
Packet 1: 119 - 138 Bloomberg Data Guide |
|
| Post-class test and solution | ||
In Practice Webcast #4 |
Deconstructing a regression beta page | |
| Closing thoughts on regression betas Determinants of beta - Nature of products/services - Operating leverage - Financial leverage Betas as weighte averages - Acquisiton effects on beta - Introduction to bottom up betas |
Packet 1: Pages 139-161 | |
| Post-class test and solution | ||
Corporate Finance Puzzle/Story of the week #5 |
Groupon: A CEO is fired | |
| 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 |
Pure Play Beta slide Packet 1: Pages 162-170 |
|
| Post-class test and solution | ||
Quiz 1: Review Session (3/8/13) Webcast, streamed (need a good internet connection) |
Review session for quiz 1 | Presentation Past Quiz 1s Solutions to past Quiz 1s |
| In Practice Webcast #5 | Estimating a bottom up beta | |
| 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: 171-181 | |
Private Business Costs of equity |
||
| Post-class test and solution | ||
Corporate Finance Puzzle/Story of the Week #6 |
Forbes list of 400 biggest private businesses | Questions |
Cost of Capital (continued) |
Yankee infield Packet 1: 182-204 |
|
| Post-class test and solution | ||
In Practice Webcast #6 |
Debt and the cost of debt | Webcast |
| Measuring investment returns - Accounting earnings & returns - Earnings to cash flows - Incremental cash flows |
Packet 1: 204-232 | |
| Post-class test and solution | ||
Corporate Finance Puzzle/Story of the Week #7 |
World's Best CEOs | Questions |
| Time Weighted returns - NPV and IRR - Terminal versus Salvage value - Currency Choices Dealing with uncertainty |
Packet 1: 233-254 | |
| Post-class test and solution | ||
In Practice Webcast #7 |
Estimating ROIC and ROE | Webcast Walmart 10K (2013) Walmart 10K (2012) Spreadsheet |
14 (4/1/13) (First 10 minutes have no video.. technical difficulties) |
Equity Analysis of a project: Aracruz paper plant An acquisition valuation NPV versus IRR - Multiple IRR - Different scale - Reinvestment rate assumptions |
Packet 1: 255-292 |
| Post-class test and solution | ||
Corporate Finance Puzzle/Story #8 |
The Concorde Fallacy |
Questions |
| Apple iTV - Case Discussion Comparing projects with different lives Side costs & benefits |
Apple iTV - Presentation - Excel spreadsheet Packet 1: 293-301 |
|
| Post-class test and solution | ||
In Practice Webcast #8 |
A "typical project": what and why? | Presentation Webcast |
More on project side costs & benefits Capital Structure |
Packet 1: 302-End Packet 2: 1- 10 |
|
| Post-class test and solution | ||
Quiz 2: Review Session (3/8/13) Webcast, streamed (need a good internet connection) |
Review session for quiz 2 | Presentation Past Quiz 2s Solutions to past Quiz 2s |
| Corporate Finance Puzzle/ Story #9 | J.C. Penney: New CEO out, Old CEO in |
Questions |
| Take the second quiz (a or b) and check out the solution (a or b)as well as the distribution of grades for the class. | Packet 2: 11-25 | |
| The trade off on debt versus equity - Tax benefits from debt - Added discipline from debt - Expected Bankruptcy costs - Expected agency costs - Loss of future flexibility |
||
| Post-class test and solution | ||
In Practice Webcast #9 |
The trade off on debt versus equity | |
| The Miller-Modigliani Theorem The financing hierarchy The Cost of capital approach to the optimal - The rationale - Mechanics |
Packet 2: 26-53 | |
| Post-class test and solution | ||
Corporate Finance Puzzle/Story #10 |
The FT story on dividend recaps in Europe Icahn's dividend recap play for Dell Dell financials Dell optimal capital structure |
Questions |
| Follow up on optimal capital structure (why and what if) Optimal capital structure for private & commodity companies Optimal capital structure for banks Reasons why the optimal varies across firms |
Packet 2: 54-78 | |
| Post-class test and solution | ||
In Practice Webcast #10 |
The optimal debt ratio | |
| The Adjusted Present Value (APV) approach Relative Analysis: Sector & Market Moving to the optimal - Urgency - Recapitalization versus Projects |
Packet 2: 79-100 | |
| Post-class test and solution | ||
Corporate Finance Puzzle/Story #11 |
Surplus notes: The best of all worlds? |
Questions |
| Designing the perfect financing - The overriding pricinple: Debt that behaves like equity - Steps in design - Three ways of finding your perfect financing |
Packet 2: 101-137 | |
| Post-class test and solution | ||
In Practice Webcast #11 |
The perfect debt - Intuitive analysis - Macro regression |
|
| Dividend Policy - Key facts about dividends - The dividend trade off * Dividends don't matter * Dividends are bad * Dividends are good |
Packet 2: 138-166 | |
| Post-class test and solution | ||
Quiz 3: Review Session (3/8/13) Webcast, streamed (need a good internet connection) |
Review session for quiz 3 | Presentation Past Quiz 3s Solutions to past Quiz 3s |
| Corporate finance puzzle/story #12 | Apple enters the debt market - The news story - My blog post on Apple - An assessment of Apple's optimal capital structure |
Questions |
| Take the third quiz (a or b) and check out the solution (a or b)as well as the distribution of scores for the class. | Packet 2: 167-181 | |
| Good reasons for paying dividends - The Dividend Clientele story - The Dividend Signaling story - The Bondholder expropriation story The cash/trust approach to assessing dividend policy |
||
| Post-class test and solution | ||
In Practice Webcast #12: Assessing dividend policy |
Dividend policy - How much could the company have paid out (FCFE)? - How much did it pay out? - Do I trust management? |
|
| Dividend policy (continued) - FCFE: Measurement & Intuition - FCFE vs Cash Returned - Trust & Cash balances Relative analysis |
Packet 2: 182-216 | |
| Post-class test and solution | ||
In Practice Webcast #13 |
Valuation - Getting updated numbers - Valuing a business - The key drivers of value |
Webcast |
| Valuation - Approaches - Drivers of intrinsic value - Changing value |
Packet 2: 217-252 | |
| Post-class test and solution | ||
| Closing presentation - A big picture review - Project findings |
Closing presentation Project summaries |
|
Final Exam: Review Session (5/15/13) Webcast, streamed (need a good internet connection) |
Review for the final exam | Presentation Past finals Solutions to past finals |
| The Final Exam (5/17/13) | Take the final exam (a or b) & check the solution (a or b) & review the distribution. You can also check your grade on the class |