Goals and objectives:
This case course is designed to provide students with an opportunity to apply and extend the concepts and tools they have learned in other courses. Its main theme is the creation of shareholder value. Topics covered include financial analysis, capital budgeting, company valuation, the cost of capital, mergers and acquisitions, leveraged buyouts, capital structure decision, initial equity offerings and dividend policy.
Given that the course largely applies material from previous courses, I do not distribute any new reading material in advance. However, to prepare for the course I will ask you to briefly review all the material related to (investment and company) valuation and capital structure choice from your previous courses and your course books.
PART 1. FINANCIAL ANALYSIS AND COMPANY VALUATION
Topic 1. Financial analysis
Topic 2. Company Valuation
Topic 3. Costs of Capital
PART 2. CORPORATE FINANCIAL POLICY AND M&A
Topic 4. Capital Structure Decision
Topic 5. Leveraged Buyouts
Topic 6. Initial Public Offerings
Topic 7. Payout Policy
Topic 8. Mergers and Acquisitions
The course is taught with cases, as well as some lectures on topics like valuation and M&A. Lecture sessions will be devoted to the issues and concepts underlying the topics of the cases discussed later. Case sessions will be devoted to a discussion of the case assigned for that day.
Students are organized into groups of three or four. It is strongly recommended that participants prepare each class by discussing the material for that day with the members of their group.
Optional reading material
To solve the cases you will most probably find it helpful to refresh your memory by reading the relevant chapters from:
- Brealey, Myers and Allen, Principles of Corporate Finance, 8th Edition (or newer), McGraw-Hill, or
- Ross, Westerfield and Jaffe, Corporate Finance, McGraw-Hill, 6th Edition (or newer) and
- Your class notes from earlier finance courses.
Additional reading material that you may find helpful and interesting include:
- Koller, Goedhart, and Wessels, “Valuation” (4rd Ed), 2005, John Wiley & Sons, Inc, NY.
- Aswath Damodaran’s “Corporate Finance,” Wiley, Inc., 2nd Edition, 2003 (or newer).
- Hawawini and Viallet: “Finance for Executives: Managing for Value Creation,” South-Western College Publishing, 4th Edition, 2011, which covers well especially financial analysis and valuation.