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Managerial Finance Professor Nisan Langberg
Welcome
Nisan Langberg [email protected] 210E
Teaching AssistantEshwar (Buvaneshwaran Venugopal)[email protected]
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?