Courses

F305

Intermediate Corporate Finance

  • 16-weeks
  • 3 credits
  • Prerequisite: F370 or F304 with a grade of C or better

Part of the finance core. Rigorous treatment of the core concepts of corporate finance for finance majors. Covers capital budgeting, the valuation of firms, and capital structure and payout policies. Makes extensive use of spreadsheet modeling to implement financial models. Serves as a foundation for all 400-level finance electives.

Learning Objectives:

1.       Capital Budgeting

A.     Valuation Framework

B.     Cash flow and free cash flow

C.     Project cash flow analysis

D.     Options in Capital Budgeting

E.      Sensitivity Analysis

2.       The Valuation Of Firms

A.     Sustainable Growth

B.     Payout/Plowback Ratios

C.     Present Value of Growth Opportunities

D.     Building Pro-forma Statements

E.      Keeping a Target Leverage Ratio

F.      Projecting Sales Growth

G.     Valuing Business Segments

H.     EVA: Economic Value Added

3.       Capital Structure And Payout Policy

A.     The Cost of Capital

B.     M&M Propositions

C.     Effect of Taxes

D.     Effect of Financial Distress

E.      Agency Costs

F.      Signaling

G.     Alternative Means of Distribution

H.     Dividend Policy

Typical Text:

      Selected chapters from Fundamentals of Corporate Finance, Fifth Edition by Ross, Westerfield, and Jordan

      Selected chapters from Corporate Finance: A Valuation Approach by Benninga and Sarig