GSBA 548 Syllabus 2017 Spring v1.docx

GSBA 548 Syllabus 2017 Spring v1.docx - GSBA 548 Corporate...

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GSBA 548: Corporate Finance Syllabus – Spring 2017 Professor: Alexander S. Gorbenko Office: HOH 711 Office Hours: Wednesday 4:00 pm – 6:00 pm, Saturday 5:30 pm – 7:30 pm Email: [email protected] COURSE DESCRIPTION This course covers the foundations of finance with an emphasis on financial-decision making. We will discuss many of the major financial decisions made by corporations and investors. Essential in most of these decisions is the process of valuation, the discussion of which will be an important emphasis of the course. Topics include criteria for making investment decisions, valuation of financial assets and liabilities, relations between risk and return, market efficiency, capital structure choice, payout policy, real options, and risk management. The course is rigorous, but practical. Our goal is to understand general principles and then apply them in practically important scenarios. Finance is a challenging topic – indeed, finance professors believe (rightly) that finance is the most challenging topic taught in business schools. Although challenging, this course will be fun and in particular will consist of fun games – that may help you understand the tricks of finance better than solid textbooks. Welcome to finance! COURSE LEARNING OBJECTIVES Through lecture, case analysis, worked samples, and by learning to apply appropriate mathematical and financial formulas and functions, you will be able to: 1. Understand basic types, goals, and implications of financial management and the role of the financial decision-maker. 2. Interpret financial statements and how they influence long-term planning and growth. 3. Understand the meaning of time value of money and how to evaluate the trade-off between dollars today and dollars sometime in the future. 4. Understand how firms decide to commit capital and its impact on cash flow (discounted cash flow). 5. Understand the different criteria used to evaluate proposed investments (e.g., net present value (NPV), IRR, payback period). 6. Understand interest rates and bonds and realize how interest rates impact bonds. 7. Determine the cost of capital, and understand and apply the concepts of the weighted cost of capital (WACC) and adjusted present value (APV). 1
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8. Recognize and understand the elements of optimal capital structure, the effects of financial leverage, bankruptcy, and the role of taxes. 9. Understand how asymmetric information and difference in incentives of various market participants affect valuation of the firm, choice of investment and the means through which it is optimally financed. FORMAT AND TEACHING METHODS There will be a reading assignment for each session as well as a case or other problems to prepare for some sessions. PowerPoint lecture notes will be posted on Blackboard well before the class. You should be prepared for each session by doing the reading and working on the assigned case or problems. Cold calling will be used.
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