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FIN 468: Intermediate Corporate Finance

FIN 468: Intermediate Corporate Finance. Topic 1–Introduction and Review Larry Schrenk, Instructor. Introduction. Larry Schrenk, Instructor E-Mail: schrenk@american.edu Office: 8 Hurst Office Telephone: 202-885-2794 Course Page

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FIN 468: Intermediate Corporate Finance

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  1. FIN 468: Intermediate Corporate Finance Topic 1–Introduction and Review Larry Schrenk, Instructor

  2. Introduction • Larry Schrenk, Instructor • E-Mail: schrenk@american.edu • Office: 8 Hurst • Office Telephone: 202-885-2794 • Course Page http://auapps.american.edu/~schrenk/FIN468/FIN468.htm • Syllabus (Next Week)

  3. Textbook • Finance 434 Managerial Finance 1, Wiley Custom Learning Solutions. • This book is a custom book created in collaboration with Texas A&M University from two books in the CFA Investment Series: • Corporate Finance: A Practical Approach by Clayman, Fridson, and Troughton and • Equity Asset Valuation by Stowe et al. • Calculator

  4. Schedule • Week 1 Introduction and Review • Week 2 Financial Statement Analysis Ch. 1 • Week 3 Capital Budgeting Ch. 2 • Week 4 Discounted Dividend Valuation Ch. 3 • Week 5 Free Cash Flow Valuation Ch. 4 • Week 7 Residual Income Valuation Ch. 5 • Week 8 Market-Based Valuation: Price Multiples Ch. 6 • Week 9 Cost of Capital Ch. 7 • Week 10 Capital Structure and Leverage Ch. 8 • Week 12 Mergers and Acquisitions Ch. 9 • Week 13 Behavioral Finance TBA • Week 14 Real Options TBA

  5. Grading • Exams (3 @ 25%) 75% • Project 25% • NOTE: I do note round grades

  6. Goals • Finance • Theory • Calculation • Real World Practice • Excel • Economic/Financial Thinking

  7. Themes I • Valuation: PV of Expected Cash Flows • Trade-Offs, e.g., Risk-Return Trade-Off • Diversification • No Arbitrage

  8. Themes II • Incentives • Agency Problems • Asymmetric Information

  9. TVM • Time Value of Money • Three Motives • Discounting and Compounding • Single Dollar • Mixed Cash Flows • Annuities and Perpetuities • Non-Annual

  10. Rates • Rates of Change • Growth • Inflation • Discounting/Compounding • Inflation • Real • Nominal

  11. Statistics • Measures • Mean • Standard Deviation, Variance • Covariance, Correlation • Techniques • Histograms • Linear Regression

  12. CAPM • Diversification • Market versus Non-Market • s versus b • Capital Asset Pricing Model

  13. Cost of Capital • WACC • Capital Structure

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