Econ 134A
Summer 2010
Syllabus
Instructor:
Dandan Zhu
Office: NH 2017
Office Hours: T 1:00-3:00pm
Email: zhu@econ.ucsb.edu
TAs:
Hrishikesh Singhania
Office: NH 2041
Office Hours: W 1:30-3:30pm
Email: hs@econ.ucsb.edu
Kevin Welding
Office: NH 2043
Office hours: Th 2:00-3:00pm
Email: welding@econ.ucsb.edu
Lectures:
T, W, Th, 11:00-12:20pm, NH 1006
Sections:
F 9:30-10:50 am, GIRV 2119, Singhania
F 11:00-12:20 pm, GIRV 1116, Singhania
F 12:30-1:50pm, GIRV 2108, Welding
Objectives
This is a first class in Corporate Finance. The purpose of the class is to provide the
student with the tools and skills to value different financial assets, make optimal
investment and portfolio decisions and understand the process of corporate decision
making.
Required Readings:
Ross, Westerfield and Jaffe (RWJ), Corporate Finance, Irwin/McGraw Hill (9th edition)
Class notes.
Evaluation
There will be two midterms and one final. Each Midterm will count for 30% of the final
grade and final 40% of the grade. No make-up exams will be given no matter how
creative the excuses are.
1st Midterm: July 1th , (Th)
2nd Midterm: July 15th , (Th)
Final: July 29th , (Th)
Course Outline
Module I: Decision Making under Certainty
(a). Introduction to Corporate Financial Decision Making, (June 22)
RWJ, Chp. I
(b). Interest Rate Mathematics, (June 23, 24)
RWJ, Chp. 4
(c). Present Value of Bonds and Stocks (June 24, 29, 30)
RWJ, Chp 8, 9
****************Midterm 1*********************
Module II: Risk and Return: Decision Making under Uncertainty
(a). Portfolio Selection, Diversification and
the Capital Asset Pricing Model
RWJ, Chp. 10, 11 (July 6, 7, 8)
(b). Capital budgeting Under Uncertainty
RWJ, Chp. 13 (July 13, 14)
****************Midterm 2 ***********************
Module III: Capital Structure and the Cost of Capital
(a).The Modigliani - Miller Theorems
RWJ, Chp. 16, 17 (July 20, 21, 22)
(b). Interaction of Investment and Financing Decisions
RWJ, Chp. 18 (July 27, 28)
*****************Final****************************