Teaching Fall 2019
Foundations of Finance
This course is intended to provide a market-oriented framework for analyzing the major types of financial decisions made by corporations. Lectures and readings will provide an introduction to present value techniques, capital budgeting principles and problems, asset valuation, the operation and efficiency of financial markets, and the financial decisions of firms. Throughout the class, we will solve problems to enhance our understanding of the covered topics. All conceptual issues are brought together through the discussion of two cases.
Debt Finance (FIN 710)
One of the critical activities a company must do well to succeed is the raising of capital. This course explores the role of financial intermediaries (such as commercial and investment banks or private equity firms) in helping non-financial firms raise capital. We study domestic and international funding markets and financial instruments available to firms to raise capital with a focus on debt capital markets. We take the view of both the firm that wants to raise capital and the investors who provide funds and study the contracts that govern firm-investor relationships. While the first part of the class focuses on debt finance in the context of corporate transactions (such as working capital and capital expenditures), we study the leveraged finance market in the second part as it has increased substantially in importance over the last decade.
We cover topics in this course such as: interest rate and credit risk; bank debt; short-term financing of working capital, the use of commercial papers; the economics of loan syndication and securitization; renegotiation inside and outside of default, secondary (loan) markets; debt restructuring; private equity and leveraged buyouts (LBOs). While most the academic literature and textbooks cover U.S. evidence, I will bring as much evidence from European debt markets as possible into the classroom and highlight similarities and differences.