STRATEGIC CORPORATE FINANCE
Summer 2013
Professor Name: Mauricio Cervantes
Status: Professor
UNIVERSITY: Tecnológico de Monterrey (from México)
email: mcervantes@itesm.mx
STUDENTS: This course is for master students, economics or related fields
TEACHING LANGUAGE: ENGLISH
PREREQUISITES: Course of Corporate Finance
Credits: 2 CREDITS
General Objective of the Course
Prepare master students or students in the last semesters of bachelor in making
major strategic financial decisions within a corporation
Methodology
The course will be conducted using the case methodology, for which 7 cases were
selected from the Harvard Business School covering major strategic financial
decisions within a corporation.
Previous to the session the students should read the case and make a specific
analysis of each (see instructions of each case attached). As a theoretical
framework for the correct interpretation and resolution of cases will be used as a
text book of Corporate Finance Ross.
Each session will discuss the scheduled cases and will review the basic theoretical
concepts.
The methodology involves mandatory:
• Attending the course.
• Performing previous readings and analysis indicated prior to the session.
• Actively participate in class
• Aprove mid-term and final exam.
Program
First Part
Topics to cover: Value of money over time, project valuation, Weighted Average
Cost of Capital, Capital Structure
THEORETICAL FRAMEWORK
Discounted Cash Flow Valuation-(Cap 4, text)
-Net Present Value and Other Investment Rules (Cap 5, text)
Capital Investment Decision-Making (Cap 6, text)
-Stock Valuation (Chapter 9, text)
-Cost of Capital (Cap 13, text)
-Valuation and Capital Budgeting-for the levered Firm (Cap 18, text)
CASES
-Airbus A3XX: Developing the World's Largest Commercial Jet
-Hansson Private Label, Inc.: Evaluating an Investment in Expansion
-Hearing-Harmonic Co.
-Midland Energy Resources, Inc.: Cost of Capital
Midterm Exam
Second Part
Topics covered: Investment Management, risk-return, CAPM, International
Finance, Risk Coverage (hedging), Project Evaluation Options (real options)
THEORETICAL FRAMEWORK
-Return and Risk: The Capital Asset Pricing Model (CAPM) (Cap 11, text)
-Risk Analysis, Real Options, and Capital Budgeting (Ch 7, text)
-Options and Corporate Finance (Cap 22)
-Options and Corporate Finance: Extensions and Applications (Cap 23, text)
-Derivative and Hedging Risk-(Cap 25, text)
-International Corporate Finance (Cap 31, text)
CASES
-Beta Management Company
Currency-Hedging Risk at AIFS
-MW Petroleum Corporation
Final Exam
Textbook
Corporate Finance, Ross, Westerfield, Jaffe, Mc Graw Hill, 9 edition
Valuation
Class participation 30%
Open Book Final Exam 40%
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Teacher Profile
Mauricio Cervantes, Ph.D.
Professor of Corporate Finance, International Finance and Business in China. PhD in
Finance, MBA, Electronic Engineer. Consultant in the areas of International Finance,
Portfolio Theory, Risk Coverage, Business in China.
He is currently Executive Director of Asia Pacific Institute of Monterrey Tech, he
was CEO of Global Traders and Mexico China Business, Director Graduate School of
Management ITESM campus Guadalajara, visiting professor at Portland State
University and University Esan in Peru. Among his publications include:
"Performance shares in China: Comparative Predictive Model CAPM, three-factor
model and reward beta", "Currency risk impact on the BMV" among others.