1. Managerial Finance Professor Nisan Langberg

2. Welcome Nisan Langberg nlangberg@uh.edu Office 210E Teaching Assistant
Eshwar (Buvaneshwaran Venugopal)

3. Goal
This introduction class will equip students with the basic framework and tools necessary for making efficient personal and corporate financial decisions while taking into account future cash flows and their risk. Students will be familiar with to main basic ideas and concepts that are later on deployed and further developed in advanced finance classes.
Methodology
Students will master the required theoretical tools and practice their application through problems in class and home assignments.

4. Before we start …
Logistics
Course schedule

5. Logistics

6. Class Material
On our website

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

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

9. Buying the book?
I recommend buying the book, especially for those students that plan to take advanced courses in finance and accounting and work in this area
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 business schools around the world

10. Group Assignments I encourage work in groups
Groups are limited to four students

11. Grade Homework assignments: 20% Quizzes: 20% Final exam: 60%
Participation: 5%

12. Office hours 5pm before class or by appointment
welcome to stop by my office (210E)
Send specific questions by

13. Course Schedule (tentative)

14. Course schedule Wednesday and Thursday classes
August 22/23
Introduction
Time value of money (chapters and 4)
Future value
present value
discounting stream of cash flows
August 29/30
Time value of money continued
Annuities, perpetuities, growing annuities and growing perpetuities
Saving for retirement
Mortgage

15. Course schedule September 10/6 Review of Time value of money with TA
Interest rates (chapter 5)
APR, EAR, Amortizing loans
Nominal and Real interest rates
The Term Structure of Interest Rates
Basics of Bond Valuation (chapter 6)
Type of bonds
Structure of bonds
Valuation
Quiz 1
September 10/6
Review of Time value of money with TA
Review of basic discounting principals
Solution of homework questions in class
Additional advanced practice questions
Practice questions CH3,4 due

16. Course schedule September 19/20 Investment Decision Rules (chapter 7)
NPV, Payback period, IRR, EVA
Multiple investment opportunities
Resource constraints, Profitability Index
Practice Questions CH5/6 due
September 26/27
Stock Valuation (chapter 9)
Investing in stocks
The Constant Dividend Growth model
The dividend and growth tradeoff
Changing growth rates
Application: ebay
Practice questions CH7 due

17. Course schedule October 10/11 Final Exam 6:00-9:00 October 3/4
(Additional class) October 1
9:00-12:00 (classroom TBD)
Pricing Risk (chapter 10)
Risk and return
Expected return, Volatility
Calculating realized returns
Excess returns
Systematic and Idiosyncratic risk
Diversification
CAPM
October 3/4
Review of final
Review of material
sample exam
Students’ questions
October 10/11
Final Exam
6:00-9:00

18. Questions before we start?