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Web Casts: Corporate Finance - Spring 2011

The 26-session corporate finance class will be webcast starting January 31, 2011, 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 2011 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 for Spring 2011 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)

The prior semester's webcasts can be found here.
If you want to join the Facebook page for this class (or just lurk), here is the link.
You can also get access to all of the emails sent for this class here.

Session (Click here) Topics covered Lecture notes

1 (1/31/11)

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

This is corporate finance!
Overview of class

Syllabus for class
Project Description

2 (2/2/11)

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

The Objective in Corporate Finance
Maximize value, stockholder wealth and stock price
Making the world safe for stock price maximization
What can go wrong?
Packet 1: 1-20

3 (2/7/11)

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

Acquisitions and corporate governance
The Bondholder-stockholder conflict
Markets and Information
Social costs
Holdings assessement
Packet 1: 21-44

4 (2/9/11)

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

Market prices fail: What's next?
- Alternative corporate governance systems
- A different objective
- Stock price maximization with limits
The right objective
Defining risk
Packet 1: 45-73

5 (2/14/11)

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

Firm Specific and Market Risk
The "marginal investor"
To the CAPM and beyond..
Inputs to the CAPM: The riskfree rate

Risk Breakdown

Packet 1: 74-93

6 (2/16/11)

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

Sovereign Default Spreads: What, why and how?
Equity Risk Premium
- Determinants
- Estimation Approaches

Default Risk & Risk premium

Packet 1: 94-111

7 (2/23/11)

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

Picking an equity risk premium
Beta
- The standard regression
- Jensen's alpha
- R squared

Reading a Bloomberg beta page & Risk Checker spreadsheet

Packet 1: 112-130

8 (2/28/11)

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

More thoughts on regression betas
Determinants of betas
- Discretionary products & services
- Fixed cost structure
- Financial leverage
Packet 1: 131-150

9 (3/2/11)

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

Bottom up Betas
- Rationale
- Process for estimating bottom up betas
Beta: Big Picture
Packet 1: 151-165

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 (3/7/11)

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

Betas and costs of equity for private businesses

 

Packet 1: 166-174

11 (3/9/11)

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

Definiing debt
The cost of debt
Leases as debt
Weights for cost of capital
Packet 1: 175-194

12 (3/21/11)

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

The Investment Principle
- Time weighted, incremental cash flow returns
- What is a project?
- Axccounting returns
Packet 1: 195-215

13 (3/23/11)

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

From earnings to cash flows
- The effect of depreciation
- Maintaenance cap ex
- Working capital
From cash flow ot incremental cash flow
- Sunk costs
- Allocated expemses
From incremental to time weighted cash flows
- NPV versus IRR

Packet 1: 215-244

14 (3/28/11)

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

Monte Carlo Simulations
Equity Analysis
- ROE
- Cash flows to equity and NPV
Valuing an acquistion target
NPV vs IRR
Packet 1: 245-277

15 (3/30/11)

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

NPV vs IRR: Reinvestment assumptions
Side costs and benefits
- Opportunitiy costs
- Cost of excess capacity
Packet 1: 278-304

16 (4/4/11)

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

Discussion of Apple iTV case
Synergies in projects
Options in projects
Analyzing an existing project
iTV case presentation & excel spreadsheet
Packet 1: 305- End

Quiz 2: Review Session (4/5/11)

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

Review for quiz 2: Covers sessions10-16 Quiz 2 Review Material

17 (4/6/11)

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

The Financing Decisions
- What is debt?
- The Life Cycle view of Financing
- The trade off on debt: Pluses and Minuses
- The Miller Modigliani Theorem
Packet 2: 1- 27

18 (4/11/11)

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
The financing heirarchy
The cost of capital approach to optimizing debt ratios

Packer 2: 28-47

19 (4/13/11)

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

More on the cost of capital approach
The follow up to the optimal
- Why?
- What if something goes wrong?
- What if you invest, instead of buying back stock
The enhanced cost of captial approach
Packet 2: 47-73

20 (4/18/11)

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

Determinants of optimal debt ratio: Cost of capital approach
APV approach
Relative Analysis
Actual vs Optimal: Follow up steps

Capital Structure addendum

Packet 2: 74-97

21 (4/20/11)

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

The right debt for your firm
Approaches to finding the right debt
- Intuitive Analysis
- Project financing
- Macroeconomic regressions
Packet 2: 98-137

22 (4/25/11)

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

The Dividend Principle
- Descriptive facts
- Three schools of though on dividends
Packet 2: 138-165

Quiz 3: Review Session (4/26/11)

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

Review for quiz 3: Covers sessions17-21 Quiz 3 Review Material

23 (4/27/11)

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
Three good reasons for paying dividends
A framework for assessing dividend policy
Packet 2: 166-187

24 (5/2/11)

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

Dividends and FCFE
How much cash is too much cash?
A Framework for assessing dividend policy
First steps in valuation
Packet 2: 188-222

25 (5/4/11)

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

Inputs to DCF valuation
- Cash flows
- Discount rates
- Growth rates
- Terminal value
Packet 2: 223-246

26 (5/9/11)

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

The Grand Finale
- A final review
- Wrapping it all up (to go)
Closing presentation

Final exam: Review Session (5/12/11)

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

Review for final exam (comprehensive) Final Review Material
Final exam (5/13/11) Take the final (a or b) and check out the solution (a or b)
Check your grade against the distribution.