Corporate Finance (ECON W4280)

Topics: Corporate finance, Economics, Venture capital Pages: 9 (1466 words) Published: April 14, 2014
Tri Vi Dang
Email: td2332@columbia.edu

Columbia University
Spring 2013

Corporate Finance (ECON W4280)

Meeting time: Tu, Th 4.10-5.25
Meeting place: Hamilton 503
Office address: IAB 1032
Office hours: Th 11.00-12.00 and other times by appointment

Course Description
The aim of this introductory course in corporate finance is to provide students with fundamental concepts for understanding firms’ financing decisions and the basic tools for the valuation of a corporation. This course is divided into two parts. Section I discusses valuation frameworks and the theory of corporate finance. The concepts developed in this section will be useful for economic decisions making irrespective of whether you intend to specialize in finance or not. Section II is more applied and will equip students with basic techniques that are required for a job as a financial analyst at an investment bank or financial consulting firm. The following topics will be covered.

I. The theory of corporate finance
I.1.
Valuation concepts
I.2.
Financial structure decisions
I.3.
Taxes and the costs of financial distress
I.4.
Financial structure and investment decisions
II. The practice of corporate finance
II.1. Internal finance, corporate control and merger analysis II.2. Private equity and venture capital finance
II.3. Business analysis and financial analysis
II.4.

Enterprise valuation

1

The course content is a mixture of conceptual structures, analytic models, case analyses and discussions. I do believe that a solid knowledge of conceptual frameworks will prove very helpful in practical decisions making. Heavy emphasis is put upon a working understanding of the economic frameworks discussed in class. The learning mode is a combination of lectures and discussion of several real cases. In particular, we will have an extensive business and financial analysis as well as a valuation exercise of Apple Inc. which will be particularly interesting to students who consider an analyst job at a financial services firm.

Course Requirements
The main course requirements are homework assignments (consisting of five or six problem sets), a midterm exam, and final exam. Grades will be allocated based on the following weights:
Problem sets: 20%
Midterm exam: 40%
Final exam: 40%.
It is important that you be regular in preparations for this course. Important concepts will be developed through both lectures and homework assignments.
Not all background material will be covered in the lectures. You are expected to read the textbook on your own to absorb considerable institutional details. Be prepared to participate in class discussions about assigned reading and previous lectures. Please ask questions during the lecture. Critical comments are highly appreciated. Working on the homework assignments is a very important part of this course. You should expect to spend a considerable amount of time working through lecture notes and problems sets.

You are allowed to work together on problem sets. However, students must submit their homework individually. In case of collaboration, the names of students you worked with should be stated on the first page of the solution sheet.

I would like to encourage you to read the business and financial press regularly during the course. Examples include the Wall Street Journal, Business Week, Economist. Also, please feel free to talk to me if you need career advice and want to hear my opinion.

2

Readings
Textbook
Berg, Jonathan and Peter DeMarzo: Corporate Finance, Prentice Hall, Second Edition, 2011 (ISBN: 978-0-13-608943-8).
Lecture notes (Slides)
For each session students will obtain a handout that can be downloaded from Courseworks. Optional readings
The following papers can be downloaded from JStor.
Altman, E.I. (1984): A Further Empirical Investigation of the Bankruptcy Cost Question, Journal of Finance 39, 1067-1089.
Baker, G. B. (1992): Beatrice: A Study in the Creation and...
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