Web Casts: Corporate Finance - Spring 2008

The 26-session corporate finance class will be webcast starting January 28, 2008, and the lectures will be available as Real Player files (You can download Real Player for free by going to http://www.real.com). 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 the class.
Lecture note packet 1: Management Objectives and Investment Analysis (Sessions 1-14: Download pdf file. You can also get two slides per page, if you want to save paper.) Updated for Spring 2008 class
Lecture note packet 2: Capital Structure, Dividend Policy and Valuation (Sessions 15-26: Download pdf file). You can also get two slides per page, if you want to save paper.) Not yet updated for Spring 2008 class

This page will include the webcasts from the current class. The prior semester's webcasts can be found here.

Session (Click here) Topics covered Lecture notes
1 (1/28/08)
Introduction to Class
First Principles of Corporate Finance

Syllabus for class
Project Description

2 (1/30/08)
The Objective in Corporate Finance
- Maximizing value versus price
- The Utopian world of pure corporate finance
- The stockholder- manager link
Packet 1 (1-18)
3 (2/4/08)
Managerial interests versus Stockholder interests
Bondholders versus Equity Investors
Markets and Information

Holdings analysis
Disney HDS 2006
Packet 1 (18-35)

4 (2/6/08)
Markets versus Managers
Social costs and benefits
Alternatives to Stock Price Maximization
Making your choice
Packet 1 (36-59)
5 (2/11/08)
Risk
- What is risk?
- A "good" risk and return model
- The CAPM and alternatives
Packet 1 (60-83)
6 (2/13/08)

The Riskfree rate
- Criteria
- What if there is no default-free entity?
The Risk premium
- What is it?
- Survey and historical premiums

Packet 1 (84-99)
7 (2/20/08)
Implied Equity Risk Premiums
Picking an equity risk premium
Betas and Return regressions
Jensen's Alpha
Packet 1 (100-115)
8 (2/25/08)
The R-squared
Service Betas
From betas to expected returns and cost of equity
First steps in beta determinants
Packet 1 (116-129)
9 (2/27/08)
Determinants of Betas
Betas as weighted averages
- Beta after a merger
- Bottom up beta for a company
Packet 1 (130-147)
10 (3/3/08)
Take the quiz(a or b), check the solution (a or b) and compare your score to the distribution
More on bottom up betats
Packet 1 (148-153)
11 (3/5/08)
Betas, Total Betas and Cost of equity for a private company
Debt
- What is debt?
- The cost of debt
Packet 1 (154-170)
12 (3/10/08)
Dealing with Hybrids
Weights for debt and equity
Measuring returns
- Cash flows versus Earnings
Packet 1 (171-187)
13 (3/12/08)

Analyzing a Project|
- Estimation issues
- Estimating Expected earnings
- The return on capital
- Firm-wide return on capital and EVA
- From earnings to cashflows

Packet 1 (188-209)
14 (3/24/08)

Incremental Cash flows
Time weighted incremental cashflows
- NPV and IRR
- Terminal and Salvage value
- NPV versus IRR
- Comparing projects with different lives

Packet 1 (210-237)
15 (3/26/08)
Preserving consistency: Currency effects, Real versus Nominal
Equity Analysis
What if? The place of sensitivity analysis
Side costs and side benefits
Packet 1 (238-264)
16 (3/31/08)
The Home Depot Case
More on side costs and benefits
Presentation
Packet 1 (265-274)
17 (4/2/08)
Take the second quiz (a and b) and check out the solutions (a and b). Check out the distribution.
The options to delay, expand and abandon in capital budgeting
Packet 1 (275- End)
18 (4/7/08)
The financing mix question
The trade off on debt
The Miller Modigliani Theorem
Packet 2 (1- 28)
19 (4/9/08)
The optimal debt ratio
- Cost of capital approach
Packet 2 (29-52)
20 (4/14/08)
More on the cost of capital approach
- Downside protection
- Invest versus Stock buyback
- Special cases
- Determinants of the optimal debt ratio
Packet 2 (53-74)
Handout: CS Examples
21 (4/16/08)
The APV approach
Relative Analysis
From actual to optimal
Basics of debt deisgn
Packet 2 (75-96)
22 (4/21/08)

The five steps in designing the perfect debt
Debt design amplified
- The intuitive approach
- The project based approach
- The "firm-wide" approach

Packet 2 (97-126)
23 (4/23/08)
Take the third quiz (a and b) and check out the solutions (a and b). Check out the distribution.
Closing thoughts on debt design
Intoduction to dividends and stock buybacks
Packet 2 (127-139)
24 (4/28/08)
Dividends don't matter
Dividends are bad (The tax argument)
Dividends are good (Clientele effect, Signalling, Bondholder wealth)
FCFE and a framework for assessing dividends
Packet 2 (140-171)
25 (4/30/08)
Examples of dividend analysis
Basics of valuation
Packet 2 (172- 210)
26 ( 5/5/08)
Closing presentation - Corporate Finance as a whole..

Closing presentation

Summary Data: All projects

  Take the final exam (a and b) and check out the solutions (a and b). Check out your grade..