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The 26-session corporate finance class will start on January 29, 2024, 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
.
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 2024 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 2024 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:
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 very brief introduction to Corporate Finance |
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1 (1/29/24)
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This is corporate finance! Themes for class Class Structure |
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| Post-class test and solution | ||
Corporate Finance Puzzle #1 |
Stakeholders versus Stockholders |
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| 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 |
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| Post-class test and solution | ||
In Practice Webcast #1 |
Collecting Data | |
Corporate Governance (Continued) |
||
| Post-class test and solution | ||
Corporate Finance Puzzle #2 |
Family Group Corporate Governance |
|
Alternatives to stock price maximization |
||
| Post-class test and solution | ||
In Practice Webcast #2 |
Assessing corporate governance | Webcast Presentation HP Annual Report HP DEF14A |
Wrapping up the End Game |
Lecture Note packet 1: 74- 98 | |
| Post-class test and solution | ||
To diversify or not to diversify? |
||
Risk & Return Risk free Rates Equity Risk Premiums - A Start |
Lecture Note packet 1: 99 - 124
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|
| Post-class test and solution | ||
In Practice Webcast #3 |
Analyzing the stockholder base | |
In Practice Webcast #4a |
Estimating a risk free rate |
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How risk averse are you?
|
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7 (2/21/24) Zoom class (with a 3 minute pause, five minuts into class)
|
Equity Risk Premiums |
|
| Post-class test and solution | ||
| In Practice Webcast #4b | The logic and the measurement questions behind equity risk premiums are examined in this webcast. | |
In Practice Webcast #4c |
Estimate a company's equity risk premium |
|
Quiz 1: Review Session
|
Review session for quiz 1 | |
Beta Regressions |
||
| Post-class test and solution | ||
Quiz 1: Review Session
|
Review session for quiz 1 | |
Corporate Finance Puzzle #5 |
What's in a beta? |
|
| 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: 161-182 | |
| Post-class test and solution | ||
In Practice Webcast #5 |
Deconstructing a regression beta page | |
In Practice Webcast #5a
|
Estimating a bottom up beta | |
10 (3/4/24) (Quiz-shortenened session) |
Quiz 1 and solution | Lecture Note packet 1: 183-192 |
Bottom up Betas (continued) |
||
| Post-class test and solution | ||
Corporate Finance Case (Due March 27, before class)
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Costco Clinics |
Due on March 27 as a group project before class |
Cost of Capital (continued) |
Lecture Note packet 1: 193-218 | |
| Post-class test and solution | ||
In Practice Webcast #6 |
Debt and the cost of debt | Webcast |
| Measuring investment returns - First Principles on measuring returns - Hurdle rates for projects - Estimating earnings and cash flows |
Lecture Note packet 1: 219-242 | |
| Post-class test and solution | ||
Sunk Costs: Theory and Reality |
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| Measuring investment returns - Time Weighted Incremental cash flows - Dealing with currencies - Dealing with uncertainty Equity-based analysis Hedging |
Lecture Note packet 1: 243-269 | |
| Post-class test and solution | ||
In Practice Webcast #7 |
Estimating ROIC and ROE | Webcast Walmart 10K (2013) Walmart 10K (2012) Spreadsheet |
Quiz 2: Review Session
|
Review session for quiz 2 | |
Equity Analysis Acquisition as a Project |
Lecture Note packet 1: 270-313 | |
| Post-class test and solution | ||
Sector Risk |
The set up & questions | |
15 (3/27/24) |
Costco Clinic CaseDiscussion |
|
| Post-class test and solution | ||
In Practice Webcast #8 |
A "typical project": what and why? | |
16 (4/1/24) |
Quiz 2 and solution | Lecture Note packet 1: 331-End |
| Project Options Looking at past projects Wrap up of the Investmennt Principle |
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| Post-class test and solution | ||
Closing up investment analysis |
||
| Post-class test and solution | ||
In Practice Webcast #9 |
The trade off on debt versus equity | |
The Miller Modigliani Theorem |
Lecture Note packet 2: 22-55 | |
| Post-class test and solution | ||
The US tax code (pre 2017 tax reform) |
||
More on the Cost of Capital Approach |
Lecture Note packet 2: 55-86 | |
| Post-class test and solution | ||
In Practice Webcast #10 |
The optimal debt ratio | |
The APV Approach |
Lecture Note packet 2: 87-112 | |
| Post-class test and solution | ||
Quiz 3: Review Session |
Review session for quiz 3 | |
Corporate Finance Puzzle #9 |
The Dark Side of Debt |
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Designing the perfect financing |
Lecture Note packet 2: 113-146 | |
| Post-class test and solution | ||
In Practice Webcast #11 |
The perfect debt - Intuitive analysis - Macro regression |
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| Quiz 3 and solution | Lecture Note packet 2: 147-168 | |
Dividend Policy |
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| Post-class test and solution | ||
Corporate Finance Puzzle #10 |
The Buyback debate |
|
23 (4/24/24) |
Dividends are bad (because of tax disadvantage) Dividends are goodGood Reasons for paying dividends Actual versus Potential Dividends Trust in Management |
Lecture Note packet 2: 169 - 201 |
| Post-class test and solution | ||
In Practice Webcast #12 |
The trade off on dividends (whether to pay them and/or increase them) | |
In Practice Webcast #13 |
Dividend Assessment - Measuring Potential Dividends (FCFE) - Judging cash return policy |
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Final Exam: Review Session |
Review session for final exam | |
Dividend Assessment (continued) |
Lecture Note packet 2: 202-230 | |
| Post-class test and solution | ||
Valuation |
Lecture Note packet 2: 231- 253 | |
| Post-class test and solution | ||
In Practice Webcast #15 |
Valuation - Telling a business story - Connecting narrative to numbers - Valuation Diagnostics |
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| Closing presentation - A big picture review - Project findings |
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| Final Exam (5/13/24) | Final Exam and Solution |
