Dr. H. H. Friedman

Corporation Finance

TEXTBOOK: Foundations of Finance:  The Logic and Practice of Financial Management by Arthur J. Keown, Martin, Petty, and Scott, Prentice-Hall, 2003

Topic 1. Introduction, axioms of financial management, financial instruments, puts and calls (Chapters 1, 2)

Topic 2. Financial statements, financial ratio analysis (Chapters 3, 4)

Topic 3. Time value of money, present value, future value, annuities, perpetuities (Chapter 5)

Topic 4. Valuing stocks and bonds, coupon rate vs. yield to maturity (Chapters 7, 8)

EXAM 1

Topic 5. Capital budgeting, payback method, Average accounting return (AAR), NPV method, NTV method, IRR, profitability index (Chapter 9)

Topic 6. Capital budgeting under uncertainty: adjusting the discount rate, certainty equivalent method (Chapter 10)

Topic 7. Cost of capital, cost of debt, cost of preferred stock, cost of common stock, cost of retained earnings, weighted average cost of capital (Chapter 11)

Topic 8. Portfolio theory, diversification, systematic risk, beta coefficients, (CAPM) Capital Asset Pricing Model (Chapter 6)

Topic 9. Optimal capital structure, net income approach vs. net operating income approach, Modigliani-Miller, break-even analysis, operating leverage, financial leverage, EBIT-EPS Analysis (Chapter 12)

Topic 10 (Time Permitting). Dividend policy, Modigliani-Miller theory (Chapter 13)

EXAM 2

GRADES: There will be two exams and numerous homework assignments.

OFFICE HOURS:

Monday and Thursday: 7:00 - 8:00 and 10:45 - 2:30
Room 215B (Whitehead) (718) 951-5119
E-mail: x.friedman@att.net

Recommended Software: We will use Microsoft Excel to solve finance problems.