Aswath Damodaran – Corporate Finance (NYU MBA Course WEBCAST)

What is corporate finance?

Every decision that a business makes has financial implications, and any decision which affects the finances of a business is a corporate finance decision. Also
Defined broadly, everything that a business does fits under the rubric of corporate finance. Also

Course objectives

To give you the capacity to understand the theory and apply, in real world situations, the techniques that have been developed in corporate finance. Also
Motto for class: If it cannot be applied, who cares?. Also

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To give you the big picture of corporate finance so that you can understand how things fit together. Also
Motto for class: You can forget the details, but doní’ miss the story. Also

To show you that corporate finance is fun. Also
Motto for class: Are we having fun yet?

Lecture 1:
This is corporate finance! Also
Overview of class

Lecture 2:
The objective in Corporate Finance
Maximize value, stockholder wealth and stock price
Making the world safe for stock price maximization Also
What can go wrong?
Acquisitions and corporate governance
The Bondholder-stockholder conflict
Markets and Information
Social costs Also

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Lecture 3:
Acquisitions and corporate governance Also
The Bondholder-stockholder conflict
Markets and Information
Social costs

Lecture 4:
Market prices fail: What’s next?
– Alternative corporate governance systems Also
– A different objective
– Stock price maximization with limits
The right objective
Defining risk Also

Lecture 5:
Firm Specific and Market Risk Also
The “marginal investor”
To the CAPM and beyond..
Inputs to the CAPM: The riskfree rate Also

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Lecture 6:
Sovereign Default Spreads: What, why and how? Also
Equity Risk Premium
– Determinants
– Estimation Approaches Also

Lecture 7:
Picking an equity risk premium
Beta
– The standard regression Also
– Jensen’s alpha
– R squared

Lecture 8:
More thoughts on regression betas Also
Determinants of betas
– Discretionary products & services
– Fixed cost structure
– Financial leverage Also

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Lecture 9:
Bottom up Betas
– Rationale
– Process for estimating bottom up betas Also

Lecture 10:
Betas and costs of equity for private businesses Also

Lecture 11:
Definiing debt
The cost of debt
Leases as debt
Weights for cost of capital Also

Lecture 12:
The Investment Principle
– Time weighted, incremental cash flow returns Also
– What is a project?
– Axccounting returns Also

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Lecture 13:
From earnings to cash flows Also
– The effect of depreciation
– Maintaenance cap ex Also
– Working capital
From cash flow ot incremental cash flow Also
– Sunk costs
– Allocated expemses
From incremental to time weighted cash flows Also
– NPV versus IRR

Lecture 14:
Monte Carlo Simulations Also
Equity Analysis
– ROE
– Cash flows to equity and NPV Also
Valuing an acquistion target
NPV vs IRR

Lecture 15:
NPV vs IRR: Reinvestment assumptions Also
Side costs and benefits
– Opportunitiy costs
– Cost of excess capacity Also

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Lecture 16:
Discussion of Apple iTV case Also
Synergies in projects
Options in projects Also
Analyzing an existing project

Lecture 17:
The Financing Decisions Also
– What is debt?
– The Life Cycle view of Financing
– The trade off on debt: Pluses and Minuses Also
– The Miller Modigliani Theorem

Lecture 18:
The financing heirarchy
The cost of capital approach to optimizing debt ratios Also

Lecture 19:
More on the cost of capital approach Also
The follow up to the optimal
– Why?
– What if something goes wrong?
– What if you invest, instead of buying back stock Also
The enhanced cost of captial approach

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Lecture 20:
Determinants of optimal debt ratio: Cost of capital approach Also
APV approach
Relative Analysis
Actual vs Optimal: Follow up steps Also

Lecture 21:
The right debt for your firm
Approaches to finding the right debt Also
– Intuitive Analysis
– Project financing Also
– Macroeconomic regressions

Lecture 22:
The Dividend Principle Also
– Descriptive facts
– Three schools of though on dividends Also

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Lecture 23:
Three good reasons for paying dividends
A framework for assessing dividend policy Also

Lecture 24:
Dividends and FCFE
How much cash is too much cash?
A framework for assessing dividend policy Also
First steps in valuation

Lecture 25:
Inputs to DCF valuation Also
– Cash flows
– Discount rates
– Growth rates Also
– Terminal value

Lecture 26:
The Grand Finale Also
– A final review
– Wrapping it all up (to go) Also

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Visit more course:  FINANCIAL DEVELOPMENT

The same course:  M.Rusydi Marc YorRene M.StulzRobert CinnamonSrdjan StojanovicStephen G.RyanSteve Dalton . Sumru AltugSuresh SundaresanThomas FitchTom TaulliLidiya KTom TaulliPeter Dunkart. Jo DunningBrendon BurchardBob BlyAlex BeckerAlan WeissTalmadge Harper .

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