Course Detail (Course Description By Faculty)

This course analyzes the major decisions facing corporate financial managers. It examines investment decisions, capital structure choice, and mergers and acquisitions. My primary objective is to teach you how to value a corporation. A revised detailed week by week syllabus and answers to a set of frequently asked questions will be posted by November 1 on the canvas class web page. Note that my policy on case preparation differs from some others teaching this class - see the class web site for details.  Importantly the reason why I require 35000 as a strict prerequisite is that we will use the capital asset pricing model within the first 2 weeks of class and we will use Black Scholes during the first half of class. So taking 35000 concurrently does not work.  If you are requesting an exemption from the 35000 prerequisite because you are familiar with that material and are instead taking a more advanced class, note that in your request and indicate the more advanced class you will be taking instead of 35000.  

Frequently asked questions about Kashyap’s B35200 (Corporation Finance)

How does your course differ from other instructors?

We all cover roughly the same material, so I think that many of the differences come down to style. I think that I probably put more emphasis on teaching you how to value companies than some of the other instructors. Most of the  cases I use involve valuation. Some of the other instructors include cases on other topics too. I also suspect that more of my examples are international (because of my research interests related to Japan and Europe). I teach the case on the Lehman Brothers bankruptcy in the last week of the class because it is a good advertisement for several of the advanced corporate finance electives.  

Can I take 35000 concurrently?

No that won’t work. By the second week of the term we will be using the CAPM and in week 3 we cover real options. You need to have completed 35000 (or an equivalent course) to keep up with what we will be doing.

What have you changed since the last time you taught the course?

 The basic material for this class is pretty timeless.  I have tweaked a couple of the cases.  

Why do you grade the cases?

Because I have experimented with both grading them and not grading them and when they are not graded people do not take them seriously. The course is organized so that the cases really reinforce concepts. If students do not work hard on the cases then they are not going to fully learn the material. The 14 percent weight in the overall grade is enough to penalize people who shirk but not hurt people who make a sincere effort.

Why can’t all the case write-ups be done in groups?

I require some individual effort for the same reason that I grade them in the first place. Having a group where the members take turns doing the work undermines the learning. I encourage you to discuss the cases, but I want everyone to have made a serious attempt on their own before any discussions start.

Why do you grade on class participation?

Because learning how to talk about finance is important.  The 16% grade on participation is way to encourage you to become comfortable doing that.  

Why don’t you give out solutions to the cases?

I (and other instructors) want to be able to use these cases in the future. If the answers are distributed they will find there way into future students hands and ruin the cases. The handouts that I provide include all the material that you need to match the computations that I show.  The TA will  go over the details of what I put up in class in the review sessions (or with you individually or in groups). 

Do I have to go to the review sessions?

No. If you are following the lectures and understanding the homework, then do not bother with the reviews. If you have questions, particularly on the homework, these sessions are designed to help.

How should I study for the exams?

Start with the takeaway slides that are at the end of each lecture. You absolutely need to understand these points. You should then make sure you understand how we solved the major problems worked out in class. Finally, you should do the homework. If you can do all the homework problems too (including the case write-ups), then you will do well in the class. If you do not do this you are going to have trouble. The best way to check that you are ready is to take one of the exams from prior years that are posted on the course chalk web site.

I missed class what should I do?

Review the lecture notes carefully and then try to do the homework. If you can do the homework and follow the notes you should be fine. You should make a point of also looking over the notes of someone who was in the lecture to make sure you find out what I stressed. Similarly, be sure to see Alissa Aviles to pick up any handouts you might have missed. (If you can attend one of the other sections, please do that.)

I missed an exam, can I reschedule it?

No. It is very hard to write a fair exam and without large numbers of people taking an exam you cannot tell whether a makeup would be fair.

Can I take the final early or late?

No. I won’t have the exam written until the night before so there is no time to give it early. Controlling information after the exams becomes hard and I don’t think it is fair to permit people to take it later. If you cannot make it at the scheduled time find another section. (If you do miss the final you will be given an incomplete that you can make up by taking the final in Spring quarter.)

Where is your office?

Campus office is HPC 529.  When teaching at Gleacher, I grab the first office that I can find in the suite of faculty offices on the 4^th floor.

Where are the questions for the cases?

They are posted in Canvas.

Do I need to buy the book?

I realize it is expensive, but it is an excellent resource and you will be at a definite disadvantage if you cannot do the assigned reading. I assign very little reading with the presumption that you will actually do it.

Why should I take this class?

Knowledge of this material is essential for anyone who hopes to run a business. If you do not understand how to finance a company you are very likely to make poor management decisions. For the students who are going to concentrate in finance this is the foundations course to help you get ready. 

Business 30000, 33001, 35000 (strict), and 41000 or 41001 (or 41100). Cannot enroll in BUSN 35200 if BUSN 20410 taken previously.  Non Booth students are not permitted. 

Restrictions

Berk and DeMarzo, Corporate Finance.  

14 percent of your grade will be determined by your scores on the case write-ups.  This is to give people an incentive to prepare for the case discussions.  Grading will be on a five point scale.  A perfect (or near-perfect) write-up will get a score of 4 (this grade will be rare).  A write-up that is competent but has at most some small errors will get a mark of 3.  I hope that by the middle of the course many people are getting this score.  A case write-up that is adequate and reflects a sincere effort will get a score of 2.  This will be given when there is a serious error (or errors) in an otherwise competent analysis; this will be another common score, especially for the first few cases.  A hastily prepared, error-ridden or incomplete write-up will get a mark of 1.  Write-ups that are not turned in on time will get a mark of 0.  (Rules for the case write-ups are given below).  The Lehman case is for a full class so it counts for 4%, the others each count for 2%.  

 

16 percent of your grade will be based on class participation. This is to reward people who put the concepts of the class to work by speaking in class and to penalize people who only learn passively.  You will need to sign in to class using the QR code that will be displayed within the first 15 minutes to get any class participation credit each week.  Arriving late is disruptive and rude and this creates an incentive to be on time.  Participation is graded on the quality of the comments, not the quantity.  The easiest way to get participation points is to answer the questions that no one else is willing to attempt.  Starting in the second half of the quarter I will cold-call students who have not been participating.  You have the option once per quarter to indicate that you would prefer not to be cold- called by displaying your name card perpendicularly rather than horizontally.  You will be asked in week 5 to assess your own participation so that I can let you know if my assessment and yours differs while there is still time for you to boost your participation.   To earn an excellent participation grade you ought to be speaking every week. 

 

Twenty-five percent of your grade will be based on your performance on the midterm.

 

The remaining forty-five percent of your grade will be based on the final exam.  The final will be cumulative.  If you miss the final you fail the course.  The final is not ready until the day of the exam for the 81 section, so I cannot offer it before then.  (The finals are during the scheduled class times on March 11 and 12).

Restrictions