FINANCE 646 - Corporate Finance

Course Description

This course examines important issues in corporate finance from the perspective of financial managers who are responsible for making significant investment and financing decisions. The concept of net present value, suitably adapted to account for taxes, uncertainty, and strategic concerns, is used to analyze how investment and financing decisions interact to affect the value of the firm.

A large portion of the course covers capital budgeting, first without and then with uncertainty. Throughout, emphasis is placed on the interaction between taxes and the cost of capital and capital structure. The course also includes a treatment of payout policy and the CAPM as they relate to the value-maximization objective of the firm.

We emphasize the development of problem-solving skills based on a good understanding of the business environment. Because of the practical importance of the material and as an illustration of the relevant theory, we will discuss examples and cases. Your course grade is based on a combination of

The cases are an integral part of the course. Preparation for the cases is done in groups of four to six. Case teams will be assigned randomly by the professor during the first week of class.