Corporate Finance 101: A Big Picture, Applied Class!

In my finally 7 posts, I played my version of Moneyball amongst companionship information from the terminate of 2015, looking at how companies invest their shareholders' money, how much they borrow in addition to the determinants of how much cash they supply to stockholders. That construction is the i that underlies the corporate finance bird that I direct hold taught every twelvemonth since 1984, the showtime ii years at UC Berkeley, in addition to the finally thirty years at the Stern School of Business. Each semester, for the finally few years, I direct hold also invited you, fifty-fifty if you lot are non a Stern MBA student, to follow the bird online, if you lot in addition to thence desire, inwards all its gory details. If you lot are considering this options, I idea it would brand feel to direct hold you lot on a mini-tour of corporate finance, every bit a discipline, in addition to how I aim to tackle it inwards this class.

Corporate Finance: The Big Picture

There are many versions of corporate finance that are taught inwards bird rooms. There is the accounting version of corporate finance, that uses the historical, rule-bound build of accounting every bit the reason for corporate finance. Decision making is driven past times accounting ratios in addition to fiscal statements, rather than showtime principles. There is the banking version of corporate finance, where the bird is structured around what bankers create for firms, amongst the volume of the bird beingness spent on areas where firms interact amongst fiscal markets (M&A, financing choices) in addition to the focus is less on what's correct for the firms, in addition to to a greater extent than on how the bargain making works. My version of corporate finance is built around the showtime principles of running a delineate of piece of work organisation in addition to it covers every aspect of delineate of piece of work organisation from production to marketing to fifty-fifty strategy. In illustration you lot are skeptical virtually the large film version of this class, hither is what it looks like:

All of corporate finance boils downward to 3 wide decisions, the investment decision, which looks at where you lot should invest your resources, the financing decision, where you lot create upwardly one's heed the correct mix in addition to type of debt to role inwards funding your delineate of piece of work organisation in addition to the dividend decision, where you lot determine how much to concord dorsum inwards the delineate of piece of work organisation (as cash or for reinvestment) in addition to how much to supply to the owners of the business.

Applied, non Theory

I respect theory for the sake of theory to locomote arid, in addition to I build my classes around a real uncomplicated proposition: if it cannot locomote applied, I don't beak virtually it. That application focus may seat you lot off, but my bird is essentially the equivalent of a corporate finance lab, where when I innovate a model or a hypothesis,  I acquire to sweat it out on existent companies inwards existent time. I role 6 companies through the entire bird to illustrate both the theory in addition to how its application tin dismiss vary across companies:

Thus everything I create inwards the class, from estimating hurdle rates to determining finance mix to assessing dividend policy, I sweat on Disney (a large, US, amusement firm), Vale (a global mining company, based inwards Brazil, amongst a regime involvement inwards it), Tata Motors (an India-based auto company, business office of a household unit of measurement group), Baidu (a Chinese search engine company, traded every bit a trounce companionship on the NASDAQ), Deutsche Bank (a messy, coin optic bank, amongst regulatory constraints) in addition to a small-scale privately owned bookstore inwards New York City (owned past times a third-generation owner).

The Class Structure

The bird starts on Feb 1, amongst a session from 10.30 to 11.50, in addition to continues through May 9, amongst sessions every Mon in addition to Wednesday, amongst a intermission calendar week starting March 14. The lectures are supplemented amongst slides in addition to my volume on applied corporate finance, amongst the latter beingness completely optional, since you lot tin dismiss alive without it.  The calendar for the bird is at this link.

There volition locomote 3 30-minute quizzes inwards the class, each worth 10%, spread out almost evenly across the showtime 22 sessions, in addition to each quiz volition locomote non-cumulative, roofing only the 6-7 sessions prior. In keeping amongst my persuasion that this is non virtually memorizing equations in addition to formulas, the quizzes volition locomote opened upwardly books in addition to opened upwardly notes. There is a two-hour concluding exam, which is cumulative in addition to volition locomote afterwards the concluding session  in May that volition delineate of piece of work organisation human relationship for 30% of the grade.

There volition locomote ii projects, amongst the showtime beingness an investment illustration (that I direct hold non written yet) that volition brand you lot create upwardly one's heed on whether to brand a large investment or non (Apple inwards the electrical automobile market, Google buying Twitter etc.) in addition to the 2nd beingness a semester-long do of trying every aspect of corporate finance on a companionship of your choice.

The Online Version

If you lot are inwards my class, at that topographic point is piddling to a greater extent than to locomote said, since I volition encounter you lot inwards bird on Monday. If you lot are not, you lot tin dismiss nevertheless partake inwards almost all of the class. The lectures volition non locomote carried live, but volition locomote recorded in addition to the webcasts should locomote upwardly past times belatedly inwards the day, Mondays in addition to Wednesdays, through the entire semester. You tin dismiss respect those webcasts inwards i of 3 forums:

1. My website: The links to the webcasts, every bit good every bit links to my other cloth (lecture notes, handouts, fifty-fifty emails to the class) tin dismiss locomote institute at this link. 
2. iTunes U: If you lot prefer a to a greater extent than polished format, I volition also locomote putting the bird online on iTunes U, the app that you lot tin dismiss download from the Apple shop for whatever Apple device. The link to the bird is here and if already direct hold Apple iTunes U installed on your device, you lot tin dismiss add together this bird amongst the enroll code of EPF-JFH-SHE. 
3. YouTube Playlist: I volition also locomote putting the classes upwardly on a playlist on my YouTube account. With each session that I seat up, I volition also add together links to the lecture notes used inwards the session in addition to additional exercise. 

Not only tin dismiss you lot scout the lectures in addition to review the notes, you lot tin dismiss also sweat your manus at the quizzes in addition to concluding exam, when they are given. I volition post the exams, afterwards the bird has taken them, online in addition to  I volition post the solution, amongst the grading template that I used inwards class. You volition locomote your ain grader in addition to may locomote tempted to acquire slow on yourself, but that's your choice. You tin dismiss fifty-fifty create the illustration in addition to the project, but I volition unfortunately non direct hold the resources to review or bird either. The expert tidings is that none of this should dent your bag book, but the bad tidings is that you lot volition non acquire bird credit or a certificate.

Alternative Routes

Each semester, I know that quite a few people start amongst my classes, but life real rapidly gets inwards the way. One of the problems of online classes is that without the dependent of having to acquire to a physical bird or concern virtually credit/grades, it is hard to persevere to the end. I exclusively empathise this work in addition to if, afterwards trying i or ii classes or fifty-fifty a few, you lot create upwardly one's heed that your life is likewise total for to a greater extent than materials to locomote added on. I create direct hold a few suggestions, if you lot nevertheless experience that you lot volition gain from the class:

1. Stretch it out: The bird volition rest online on all 3 forums for at to the lowest degree a twelvemonth or two. Thus, you lot tin dismiss stretch out the bird to tally your fourth dimension schedule, instead of taking it inwards calendar time. I had at to the lowest degree 3 or 4 people completing the Spring 2012 class, finally year.
2. Online Corporate Finance class: If you lot respect the 80-minute bird sessions that brand upwardly this bird unendurable, I create direct hold a compressed version of the class, where I direct hold each session in addition to create it inwards 10-15 minutes, instead of lxxx minutes. In a testimonial to how much nosotros volume upwardly college classes, it was non that tough to create in addition to you lot tin dismiss respect it on my website at this link, on iTunes U at this i or on YouTube at this one.
3. Executive Corporate Finance class: I but completed a three-day corporate finance bird for executive MBAs that is only a mildly compressed version of my regular bird in addition to you lot tin dismiss respect the links to the webcasts for that bird on my website.

The End Game

I know that some of you lot may wonder what the grab is in addition to where I innovation to hitting you lot upwardly for fees. While you lot search for my hidden agenda, I direct hold only i asking of you. If you lot respect whatever of the cloth inwards these classes to locomote useful to you, rather than give thank you lot me for it, delight transcend the favor on, past times helping someone else learn, empathise or create something. Not only volition you lot acquire far to a greater extent than out of this uncomplicated deed of kindness than the someone that you lot offering it to, but I promise that you lot volition also acquire a feel of why instruction is its ain reward.

YouTube Intro to Class


Class links (Spring 2016 MBA class)

1. My website
2. iTunes U
3. YouTube Playlist

Lecture Notes for Class

1. Syllabus in addition to Project
2. Lecture Note Packet 1
3. Lecture Note Packet 2

 Book if you lot wish it

1. Applied Corporate Finance, quaternary Edition (Warning: It is obscenely over priced but at that topographic point is non much that I tin dismiss do about it. Sorry!)