15.402
Corporate Finance
Introduction to corporate finance which focuses on financing a firm through turbulence, for innovation, and for growth. Primarily uses case studies to introduce financial analytical tools needed to make real-world value-enhancing business decisions across many industries: how to decide which projects to invest in, how to finance those investments, and how to manage the cash flows of the firm. Meets with 15.418 when offered concurrently.
Spring 2003 · Finance Theory II
Topics
- Lecture: Introduction
- Case: Wilson Lumber 1
- Case: Wilson Lumber 2
- Lecture: Capital Structure 1
- Lecture: Capital Structure 2
- Case: Debt Policy at UST Inc.
- Case: Massey Ferguson, 1980
- Lecture: Capital Structure: Informational and Dynamic Considerations
- Case: MCI Communications Corp., 1983
- Review of Financing and Capital Structure
- Case: Intel Corporation, 1992
- Lecture: Valuation of Free Cash Flows
- Case: Cost of Capital at Ameritrade
- Lecture: WACC and APV 1
- Lecture: WACC and APV 2
- Case: Dixon Corporation 1
- Case: Dixon Corporation 2
- Case: Diamond Chemicals (A)
- Lecture: Real Options
- Case: MW Petroleum Corporation (A)
- Lecture: Valuing a Company
- Case: Cooper Industries, Inc.
- Case: The Southland Corporation (A)
- Wrap-Up of Valuation
Readings
- Brealey, R., and S. C. Myers. Principles of Corporate Finance. New York, NY: McGraw-Hill/Irwin. ISBN: 0073368695.
- Higgins, R. C. Analysis for Financial Management. New York, NY: McGraw-Hill/Irwin. ISBN: 0077297652.
- Background Reading:
- Higgins. Interpreting Financial Statements . Chapter 1.
- Higgins. Evaluating Financial Performance . Chapter 2.
- Brealey and Myers. An Overview of Corporate Financing . Chapter 14.
- Piper, Thomas R. Wilson Lumber Co. Boston, MA: Harvard Business School Publishing, 1991. Case No. 9-286-122.
- Brealey and Myers. Financial Analysis and Planning . Chapter 29.
- Higgins. Financial Forecasting . Chapter 3.
- Higgins. Managing Growth . Chapter 4.
- Brealey and Myers. Does Debt Policy Matter? Chapter 17.
- Myers, S. C. Still Searching for Optimal Capital Structure . Continental Bank, Journal of Applied Corporate Finance, pp. 4-14.
- Higgins. Financial Instruments and Markets . Chapter 5.
- Brealey and Myers. How Much Should a Firm Borrow? Chapter 18.
- Higgins. The Financing Decision . Chapter 6.
- Brealey and Myers. How Corporations Issue Securities . Chapter 15.
- Mitchell, Mark. Debt Policy at UST, Inc. Boston, MA: Harvard Business School Publishing, 2001. Case No. 9-200-069.
- Baldwin, Carliss Y., Scott P. Mason, and Jennifer H. Hughes. Massey-Ferguson Ltd. – 1980. Boston, MA: Harvard Business School Publishing, 1990. Case No. 9-282-043.
- Barclay, Smith, and Watts. The Determinants of Corporate Leverage and Dividend Policies . Journal of Applied Corporate Finance 7, 4, 1995, pp. 4-14_._
- Greenwald, Bruce C., and Wilda L. White. MCI Communications Corp. – 1983 . Boston, MA: Harvard Business School Publishing, 1998. Case No. 9-284-057.
- Brealey and Myers. Warrants and Convertibles . Chapter 23.
- Jen, Choi, and Lee. Some New Evidence On Why Companies Use Convertible Bonds .
- Froot, Kenneth A. Intel Corp. – 1992 . Boston, MA: Harvard Business School Publishing, 1993. Case No. 9-292-106.
- Brealey and Myers. The Dividend Controversy . Chapter 16.
- Brealey and Myers. Leasing . Chapter 26.
- Opler, Pinkowitz, Stulz, and Williamson. Corporate Cash Holdings .
- Brealey and Myers. Why NPV Leads to Better Investment Decisions… Chapter 5.
- Brealey and Myers. Making Investment Decisions with the Net Present Value Rule. Chapter 6.
- Mitchell, Mark, and Erik Stafford. Cost of Capital at Ameritrade. Boston, MA: Harvard Business School Publishing, 2001. Case No. 9-201-046.
- Brealey and Myers. Capital Budgeting and Risk . Chapter 9.
- Brealey and Myers. Financing and Valuation . Chapter 19.
- Brealey and Myers. Where Positive Net Present Values Come From . Chapter 11.
- Higgins. Discounted Cash Flow Techniques . Chapter 7.
- LEC #: 15 · TOPICS: Lecture: WACC and APV 2 · READINGS: Same as above.
- Kester, W. Carl. Dixon Corp.: The Collinsville Plant . Boston, MA: Harvard Business School Publishing, 1999. Case No. 9-298-165.
- Bruner, Robert F. Diamond Chemicals (A). Charlottesville, VA: Darden Business School Publishing, 2001. Case No. UVA-F-1351.
- Luehrman. Investment Opportunities as Real Options . Boston, MA: Harvard Business Review, 1998.
- Brealey and Myers. Real Options . Chapter 22.
- Luehrman, Timothy A., Peter Tufano, and Barbara D. Wall. MW Petroleum Corp. (A) . Boston, MA: Harvard Business School Publishing, 1994. Case No. 9-295-029.
- Higgins. Business Valuation and Corporate Restructuring . Chapter 9.
- Brealey and Myers. Mergers . Chapter 33.
- Piper, Thomas R. Cooper Industries, Inc. Boston, MA: Harvard Business School Publishing, 1993. Case No. 9-274-116.
- Ruback, Richard S., and Elizabeth H. McNair. Southland Corp. (A). Boston, MA: Harvard Business School Publishing, 1997. Case No. 9-291-038.
- Brealey and Myers. Leverage Buyouts, Spinoffs, and Restructurings . Chapter 34.1.
- Jensen, Michael C. Eclipse of the Public Corporation . Boston, MA: Harvard Business Review, September 1989.
- Brealey, R., and S. C. Myers. Principles of Corporate Finance. 7th ed. Irvin McGraw-Hill.
- Higgins, R. C. Analysis for Financial Management. 7th ed. Irvin McGraw-Hill.
Prerequisites & course information
Prereq: 15.401 G (Fall, Spring) 3-0-6 units Credit cannot also be received for 15.418
Sources
- Course catalogue ↗2026–2027
- MIT OpenCourseWare ↗Spring 2003
- MIT OCW readings ↗
- MIT OCW calendar ↗
- MIT OCW syllabus ↗
- Historical MIT OpenCourseWare offering. Named reading entries and schedule topics are automatically extracted from the linked source pages.