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Unformatted text preview: Jeffrey F. Jaffe Spring Semester 2005 Corporate Finance FNCE 100 Syllabus, p age 1 of 8 Spring 2005 Corporate Finance FNCE 100 Wharton School of Business Syllabus Course Description This course provides an introduction to the theory, the methods, and the concerns of cor- porate finance. It forms the foundation for all subsequent courses such as speculative markets, investments and corporate finance. The purpose of this course is to develop a framework for analyzing a firm’s investment and financing decisions. Since the emphasis is on the fundamental concepts underlying modern corporate finance, the approach will be analytical and rigorous, and some familiarity with accounting, mathematical, and stat- istical tools are advantageous. The topics covered in the course include: (1) discounted cash flow (time value of money); (2) capital budgeting techniques; (3) portfolio analysis and the Capital Asset Pricing Model (CAPM); (4) security market efficiency; (5) corpor- ate financing and optimal capital structure, and (6) option pricing. Grading: There is a midterm (40%) and a final exam (60%). The midterm is scheduled for Monday, Feb. 28, 6:30 – 8:30 PM. In addition, there will be three cases. Each student must perform satisfactorily in the cases to pass the course. More will be said about the cases in class. Required Reading: The textbook used is Corporate Finance by Ross, Westerfield, and Jaffe, 7 th edition and the accompanying solutions manual. Readings: a) Value and Capital Budgeting Firms and individuals invest in a large variety of assets. The objective of these invest- ments is to maximize the value of the investment. In this part, we will develop tools than can be used to determine the best investment from several alternatives. Jeffrey F. Jaffe Spring Semester 2005 Corporate Finance FNCE 100 Syllabus, p age 2 of 8 Ch. 4 Net Present Value Ch. 5 How to Value Bonds and Stocks Ch. 6 Some Alternative Investment Rules Ch. 7 Net Present Value and Capital Budgeting b) Capital Structure As with capital-budgeting decisions, firms seek to create value with their financing de- cisions. Therefore, firms must find positive NPV financing arrangements. However, to maximize NPV in financial markets, firms must consider taxes, bankruptcy costs, and agency costs. In this part, we will develop the methodology to maximize the value of the financing decision. Ch. 13 Corporate-Financing Decisions and Efficient Capital Markets Ch. 15 Capital Structure: Basic Concepts Ch. 16 Capital Structure: Limited Use of Debt Ch. 17 Valuation and Capital Budgeting for the Levered Firm c) Risk and Portfolio Analysis In this part, we will investigate the relationship between expected return and risk for port-...
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This note was uploaded on 10/06/2010 for the course FNCE 100 taught by Professor Jaffe during the Spring '10 term at UNC Asheville.
- Spring '10
- Corporate Finance