Managerial Finance Professor Nisan Langberg

Welcome

Nisan Langberg nlangberg@uh.eduOffice 210E

Teaching AssistantEshwar (Buvaneshwaran Venugopal)eshwar.gokul@gmail.com

Goal

Equip students with the basic tools necessary for making efficient financial decisions while taking into account future cash flows and their risk.

MethodologyStudents will master the required theoretical tools and apply them to day-to-day decision of individuals (saving/retirement/mortgage…)

outline

• Logistics• Course schedule

Logistics

Class Material

On our website http://www.bauer.uh.edu/nlangberg/teaching_635.htm

Text book

I will teach and assign problems using the book Corporate Finance by Jonathan Berk and Peter DeMarzo, Perason

Alternative Reading

Further/alternative reading is Brealey, Myers and Allen, Principals of Corporate Finance, McGraw-Hill Irwin, 8th edition or higher

Buying the book?

I do recommend buying the book

• The course is built around the text book• Excellent reference book for those to plan to

work in the area of corporate finance• Taught in leading B schools around the world

Group Assignments

• I encourage work in groups• Groups are limited to four students

Grade

• Homework assignments: 20%• Quizzes: 20%• Final exam: 60%

Office hours

• 5pm before class or by appointment• welcome to stop by my office (210E)• Send specific questions by email

Course Schedule

(tentative)

Course schedule Wednesday and Thursday classes

August 26/27IntroductionTime value of money (chapters 3.1-3.3 and 4)• Future value• present value• discounting stream of

cash flows

September 3/4Time value of money continued• Annuities, perpetuities,

growing annuities and growing perpetuities

• Saving for retirement• Mortgage

Course scheduleSeptember 16/17Review of Time value of money with TA• Review of basic discounting

principals• Solution of homework

questions in class• Additional advanced

practice questions

Quiz 1

September 9/10Interest rates (chapter 5)• APR, EAR, Amortizing loans• Nominal and Real interest rates• The Term Structure of Interest

RatesBasics of Bond Valuation (chapter 6)• Type of bonds• Structure of bonds• Valuation

Practice questions CH3,4 due

Course scheduleSeptember 23/24Investment Decision Rules (chapter 7)• NPV, Payback period, IRR,

EVA• Multiple investment

opportunities• Resource constraints,

Profitability IndexPractice Questions CH5/6 due

September 30/October 1Stock Valuation (chapter 9)• Investing in stocks• The Constant Dividend

Growth model• The dividend and growth

tradeoff• Changing growth rates• Application: ebayPractice questions CH7 due

Course schedule(Additional class) October 39:00-12:00 (classroom TBD)

Pricing Risk (chapter 10)• Risk and return• Expected return, Volatility• Calculating realized returns• Excess returns• Systematic and Idiosyncratic risk• Diversification• CAPM

October 7/8Review of final • Review of material• sample exam• Students’ questions

October 15/16Final Exam6:00-9:00

Questions before we start?