MSF 672: Corporate Financial Policy and Valuation
Course Instructor:
Office Number:
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Course Meeting Times:
Course Website: Canvas
Course Objectives
The main objective of this course is the development of a framework that is useful for understanding a broad range of important corporate financial decisions. This course covers major corporate financial policy decisions. We will be focusing on topics like capital structure, initial and seasoned equity and bond issuances and buybacks, dividend/payout policy, real options for capital budgeting, mergers and acquisitions, and corporate governance. Class meetings will be mostly based on lecture notes which will be posted prior to each meeting. Each class member is expected to be well prepared for each session and to actively participate in class discussions through which I hope we can learn as much as possible in the weeks we will spend together.
After completing this course, students should have a theoretical background and a framework for considering various corporate finance problems and issues.
Course Material
The required textbook for the course is:
Ross, Westerfield, Jaffe and Jordan, Corporate Finance, 12th Edition, McGraw-Hill/Irwin, 2019 (RWJJ)
And a recommended textbook for additional reading:
Eugene F. Brigham, Phillip R. Daves, Intermediate Financial Management, 13th Edition (BD)
Other resources:
- A financial calculator (e.g., Texas Instruments BA II Plus) is required and should be brought to class on a daily basis.
- A subscription to The Wall Street Journal is also encouraged (or other finance-oriented publication like Business Week, Financial Times, etc.). (George Mason University provides free subscriptions to WSJ, NYT, and FT etc. for students, please setup your access through these links: The Wall Street Journal, The New York Times)
Grades
Your total course grade will be determined as follows:
| Problem Set Assignments | 30% |
| Mid-term Exam | 20% |
| Final Exam | 50% |
Final Exam
There will be an in-class, two-hour final exam on TBD. The final exam will be a combination of multiple choices and short answer problems. The exam will be closed book, closed notes. You can use a financial calculator. There will be no make-up final exam. In the event that a student is unable to attend the exam, it is his/her responsibility to notify me prior to the exam, with reasonable notice. Only in extraordinary circumstances, the student may be authorized to take the exam on a different date.
Problem Set Assignments
There will be six problem sets to be completed individually. Part of the exams will be taken either directly or slightly modified from the problem sets, so it is important that you do homework problems. You need to submit your assignments via Canvas by the due day. Late submissions will not be accepted without prior notice.
Class Participation
I will not take attendance; however, your attendance and participation are extremely important. This is NOT a “read-notes and learn-by-yourself” type of course and you should actively listen to the lectures and participate in class discussions if you want to learn the material and succeed in this class.
Final letter grades for the course are determined by the following table:
| Grade | Range |
| A+ | >= 97.0 |
| A | 93.0 – 96.9 |
| A- | 89.0 – 92.9 |
| B+ | 86.0 – 88.9 |
| B | 83.0 – 85.9 |
| B- | 80.0 – 82.9 |
| C+ | 75.0 – 79.9 |
| C | 70.0 – 74.9 |
| D | 60.0 – 69.9 |
| F | <= 59.9 |
Program-Level Learning Goal
Analytical Decision Making: Demonstrate the ability to analyze uncertain complex management situations using appropriate tools, techniques and information systems for decision-making.
Tentative Course Outline (Sample)
| Date | Topics | Readings | Assignments |
| Week 1 | Capital Structure | RWJJ 16 | |
| Week 2 | Capital Structure | RWJJ 17 | Problem Set 1 |
| Week 3 | Dividend/Payout Policy | RWJJ 19 | Problem Set 2 |
| Week 4 | Real Options for Capital Budgeting | RWJJ 7 |
Problem Set 3 Mid-term |
| Week 5 | IPO, SEO for equity & debt | RWJJ 20 | Problem Set 4 |
| Week 6 | Mergers and Acquisitions | RWJJ 29 | Problem Set 5 |
| Week 7 | Corporate Governance | BD10 | Problem Set 6 |
| Week 8 | Final Exam TBD (It is a two-hour exam but I can give you extra 40 minutes.) |
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