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Web Casts: Corporate Finance - Spring 2014
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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):
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 2014 class
Lecture
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 2014 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 |
1
(2/3/14) Webcast, streamed (need a good internet connection) |
This is corporate finance! Overview of class |
|
| Post-class test and solution | ||
Corporate Finance Puzzle #1 |
Microsoft gets a new CEO |
The set up & questions |
2 (2/5/14) (Skip the first few minutes of dark video, since class started 30 minutes late due to the snow storm. The streaming webcast is the best option) |
The objective in running a business - Value maximization versus Stock price maximization - The "utopian" world of price maximization - The real world intrudes |
Project Description |
| Post-class test and solution | ||
In Practice Webcast #1 |
Assessing corporate governance | Webcast Presentation HP Annual Report HP DEF14A |
More on the objective function |
Packet 1: 15-40 | |
| Post-class test and solution | ||
Corporate Finance Puzzle #2 |
Corporate Social Responsibility
|
Discussion & Questions |
| Alternatives to stock price maximization The strongest argument for price maximization Defining risk and first steps in risk & return |
Packet 1: 41-70 | |
| Post-class test and solution | ||
In Practice Webcast #2 |
Analyzing the stockholder base | |
Corporate Finance Puzzle #3 |
Risk = Danger + Opportunity |
Discussion & Questions |
| Risk and Return: Next steps - The CAPM - Alternatives to the CAPM - Inputs to the CAPM: The riskfree rate |
Packet 1: 71-96 | |
| 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 - Company ERP |
Packet 1: 97-119 | |
| Post-class test and solution | ||
Corporate Finance Puzzle #4 |
Country Risk, Default Risk & Equity Risk Premiums - Sovereign CDS spreads for Latin America (2004-2014) - Country equity risk premiums at the start of each year from 2005 to 2014 (based on sovereign ratings) - My blog post on risk in emerging markets (July 2013) - My blog post on the effect of risk on equity prices in emerging markets (July 2013) |
Discussion & Questions |
| Betas - Return Regression - Performance and risk assessment Determinants of Betas |
Packet 1: 120 - 139 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 140-158 | |
| Post-class test and solution | ||
Corporate Finance Puzzle #5 |
Breaking up is hard to do |
Discussion & Questions |
9 (3/5/14) Webcast, streamed (need a good internet connection) |
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 - Cost of equity for a privately owned business |
Packet 1: Pages 159-171 |
| Post-class test and solution | ||
Quiz 1: Review Session (3/7/14) 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: 172-183 | |
Private Business Costs of equity |
||
| Post-class test and solution | ||
Corporate Finance Case (due April 2@10.30 am) |
Whole Foods goes eat in - The WF Dining Case - Peer group (as excel spreadsheet) |
|
Cost of Capital (continued) |
Yankee infield Packet 1: 183-208 |
|
| 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: 209-231 | |
| Post-class test and solution | ||
Corporate Finance Puzzle #6 |
Sunk Costs: Theory and Reality |
Discussion & Questions |
| Time Weighted returns - NPV and IRR - Terminal versus Salvage value - Currency Choices Dealing with uncertainty |
Packet 1: 232-262 | |
| Post-class test and solution | ||
In Practice Webcast #7 |
Estimating ROIC and ROE | Webcast Walmart 10K (2013) Walmart 10K (2012) Spreadsheet |
| Equity Analysis of a project: Aracruz paper plant An acquisition valuation NPV versus IRR - Multiple IRR - Different scale - Reinvestment rate assumptions |
Packet 1: 263-302 | |
| Post-class test and solution | ||
Weekly Puzzle #7 |
Valuing the Star Wars Franchise - The franchise's economic history (through 2012) - My valuation of Star Wars (in November 2012) - Plans for future Star Wars movies (news story) |
Discussion & Questions |
| Whole Foods Dining - Case Discussion The value of synergy Options in projects Assessing existing projects |
Whole Food Dining - Presentation - Excel spreadsheet Packet 1: 303- End |
|
| Post-class test and solution | ||
In Practice Webcast #8 |
A "typical project": what and why? | Presentation Webcast |
Capital Structure |
Packet 2: 1- 21 |
|
| Post-class test and solution | ||
Quiz 2: Review Session (4/8/14) Webcast, streamed (need a good internet connection) |
Review session for quiz 2 | Presentation Past Quiz 2s Solutions to past Quiz 2s |
Weekly Puzzle #8 |
Bondholders versus Stockholders: The Sears story - The Sears Garage Sale (and consequences for bondholders) - Eddie Lampert as CEO: The Employee Perspective |
Discussion & 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: 23-41 | |
| The trade off on debt versus equity - The trade off and Miller-Modigliani - The Financing Heirarchy - Introduction to the Cost of Capital Approach |
||
| 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: 42-74 | |
| Post-class test and solution | ||
Weekly Puzzle #9 |
Leveraged Recapitalization: Motives and Consequences - Recapitalizations: Big Picture - The Dell Fight: Michael Dell's plans, Icahn's counter and the grand finale |
Discussion & Questions |
| Optimal capital structure for banks Reasons why the optimal varies across firms Relative capital structure: What and Why |
Apple & Google: FA Apple: Capital Structure Google: Capital Structure Packet 2: 75-95 |
|
| Post-class test and solution | ||
In Practice Webcast #10 |
The optimal debt ratio | |
| Moving to the optimal - Urgency - Recapitalization versus Projects Designing the perfect debt - The basic idea - Steps in customizing financing |
Packet 2: 96-117 | |
| Post-class test and solution | ||
Corporate Finance Puzzle/Story #10 |
Surplus notes: The best of all worlds? |
Questions |
| Designing the perfect financing - Ways of finding your perfect financing - Fixing mismatches Dividend Policy - Descriptive facts - Dividend Yield & Payout |
Packet 2: 118-153 | |
| Post-class test and solution | ||
In Practice Webcast #11 |
The perfect debt - Intuitive analysis - Macro regression |
|
Dividend Policy |
Packet 2: 154-180 | |
| Post-class test and solution | ||
Quiz 3: Review Session (4/29/14) 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 #11 |
Apple's dividend/buyback |
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: 181-193 | |
| 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 |
Apple: FCFE & Cash Returned Packet 2: 194-223 |
|
| 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: 224-255 | |
| Post-class test and solution | ||
| Closing presentation - A big picture review - Project findings |
Closing presentation Project summaries |
|
| The Final Exam (5/17/13) | Take the final exam (a or b) & check the solution (a or b). You can also check your grade on the class |