Area of Study & Practice
- Business Organization and Finance
Topics include: the time value of money; the relation between risk and return; the workings and efficiency of capital markets; behavioral finance; valuing perpetuities and annuities; valuing corporate securities (stocks, bonds, and options); optimal capital structure and dividend policies; basic financial accounting; assessing the value of going concerns, forensic finance, how these principles are applied in the practical practice of law, and the judicial interpretation of bond covenants. Although the materials will stress the intuition of these principles, students will be expected to acquire a working knowledge of how to apply the analytical tools of finance to real-world problems.
The materials for the course are contained in a course packet that students should pick up prior to the first class meeting. The packet contains class notes that students should bring to class. These notes are not self-contained in that they are not complete without the accompanying lecture. They are intended to complement (not replace) the classroom lectures.
The required text for the course is Corporate Finance, Principles and Practice, 2nd Edition, by William J. Carney, Foundation Press, 2010. This text does a nice job integrating principles of corporate finance and the practice of corporate law. Where appropriate the class notes will reference this text.
For students who want a more in depth treatment of corporate finance from a financial economics perspective, I recommend Principles of Corporate Finance by Richard A. Brealy and Stewart C. Myers, Irwin McGraw-Hill, editions 5 and later. Note that the latest edition, the 8th, includes a third author. The authors are Richard Brealy, Stewart Myers and Franklin Allen. This is the most popular (and expensive) corporate finance textbook and is used in all the top business schools in the country.
Grading in the course will be based on the performance on problem sets that will be done out of class in groups of up to four students throughout the term, and take-home final exam. The number and due dates for the problem sets will be provided at the first class.
Please note that course organization and content may vary substantially from semester to semester and descriptions are not necessarily professor specific. Please contact the instructor directly if you have particular course-related questions.