DOKUZ EYLUL UNIVERSITY
FACULTY OF BUSINESS
MASTER OF FINANCE
MSF 501 CORPORATE FINANCE
Instructor
Office
Office Hours
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Prof. Dr. M. Banu Durukan
B Block Room 126
Monday 11.00-12.30 or by appointment
412 8248
banu.durukan@deu.edu.tr
http://kisi.deu.edu.tr/banu.durukan
TTT
Course Description: The objective of this course is to provide an advanced analysis of
the major issues affecting the financial policy of a modern corporation. We will review some
of the important theoretical work then we will discuss cases and articles. A number of
business cases provide examples of finance related events, practices and applications. The
articles discussed will enhance the students’ theoretical understanding of the topics. Given
this basic framework, students should understand the main financial decisions facing the firm,
how these decisions are related and the tools that finance offers in order to help make these
decisions. The major issues to be covered are financial statement analysis, the valuation
process, capital budgeting decisions, cost of capital, capital structure, dividend policy,
mergers and acquisitions, and financial distress.
The students are required to participate fully in the discussions in the course and the success
here in lies in a productive exchange of ideas.
Reference Books:
1- Ross S.A, R.W. Westerfield, J. Jaffe, Corporate Finance, 7/e, Mc-Graw
Hill, 2005, USA. (http://www.mhhe.com/rwj)
2- Ross, S.A, R.W. Westerfield, B.D.Jordan, Fundamentals of Corporate
Finance, International Edition 6/e, Mc-Graw Hill, 2003, USA.
(http://www.mhhe.com/rwj)
Grading:
30 % Mid-Term Exam
30 % Final Exam
40 % Assignments (Topic Presentations 20% + Other Assignments 20%)
Topic Presentations: Students will form groups of two or three in the first week. Each
group will be assigned one of the topics below. The presentation should not exceed 20
minutes and it should help initiate questions and class discussions.
Mergers & Acquisitions
Real Options
Financial Distress
Private Equity
Case Assignments: Each group (groups of two or three) has to hand in the solutions to
case questions. Case assignments will be announced during the course.
Article Assignments: Every student has to hand in a one page memo which is a
discussion of the articles assigned, and be ready to discuss them in class. If more than one
article assigned, then the memo will be the discussion of the issue based on all the articles.
No separate memos for each article.
Course Outline1
Overview
- Introduction to Corporate Finance (Ch. 1)
- Article Discussion:
o History of Finance: An Eyewitness Account, Miller.
o A (Relatively) Brief history of finance Ideas, Weston
Sep. 24 th
Agency Theory and Corporate Governance
Oct. 1 st
Article Assignment Due
- Theory of the Firm: Managerial Behavior, Agency Costs and Ownership
Structure, Jensen, Meckling
- Corporate Ownership around the World, La Porta, Lopez-De-Silanes, Shleifer
- International Corporate Governance, Denis, McConnel
Accounting Statements and Cash Flow
- Accounting Statements and Cash Flow (Ch. 2 and Appendix 2A)
Oct. 8 th
Financial Planning and Growth
- Financial Planning and Growth (Ch. 3)
Oct. 15th
Net Present Value
- Net Present Value (Ch. 4)
Oct. 22 nd
Capital Budgeting I
- Some Alternative Investment Rules (Ch. 6)
Nov. 5 th
Article Assignment Due
- The Theory and Practice of Corporate Finance, Graham, Harvey
Capital Budgeting II
- NPV and Capital Budgeting (Ch. 7)
Nov. 12 th
Article Assignment Due
- Finance Theory and Financial Strategy, Myers
- Capital Budgeting, Weaver, Peters, Cason, Daleiden
MID-TERM EXAM
1
The instructor reserves the right to change the course outline if needed.
Nov. 19 th
Stock and Bond Valuation
- How to Value Bonds and Stocks (Ch. 5)
Nov. 26 th
Cost of Capital
- Risk, Cost of Capital and Capital Budgeting (Ch. 12)
Dec. 3rd
Capital Structure I
- Capital Structure: Basic Concepts (Ch. 15)
Dec. 10 th
Article Assignment Due
o The Modigliani-Miller Propositions after thiry years, Miller
o The Modigliani Miller Propositions after fourty years
o Still Searching for Optimal Capital Structure, Myers.
Capital Structure II
- Capital structure: Limits to the Use of Debt (Ch. 16)
- Valuation and Capital Budgeting for the Levered Firm (Ch. 17)
Dec. 17 th
Article Assignment Due
o Capital Structure Puzzle, Myers
o The Capital Structure Puzzle: Another Look at the Evidence, Barclay, Smith
o Stern Stewart Roundtable on Capital Structure and Stock Repurchase
Short-term Finance
- Short-term Finance and Planning (Ch. 26)
- Cash Management (Ch. 27)
- Credit Management (Ch. 28)
Dec. 24 th
Article Assignment Due
o State of the Art of Short Rum Financial Management, Gentry
Topic Presentations
Mergers &Acquisitions
Financial Distress
Real Options
Private Equity
Jan. 7 th
FINAL EXAM
Jan. 14 th