1. Corporate Finance Ronald F. Singer FINA 4330
Introduction Lecture 1
Fall 2010

2. Administration Instructor: Ronald F. Singer Phone: 713-743-4771
Office Hours: Tuesday, 4:45 to 6:00 and Thursday, 4:00 to 4:45.
Room 210F Melcher Hall
Webpage:

3. Class Administration Exams Late Entrants Reading, Eating, etc.
Attendance
Texts:
Ross, Westerfield and Jaffe, Corporate Finance, 9th edition
Wall Street Journal

4. Review of Principles of Financial Management
Three areas of inquiry
Capital Budgeting
Capital Structure
Payout policy

5. Efficient Markets
Efficient Markets versus Perfect Capital Markets

6. Capital Budgeting What is to be discounted? How do we discount?
What is the decision rule and why?

7. What determines the value of securities
Security Pricing Models
Capital Asset Pricing Model (CAPM)
Arbitrage Pricing Model (APT)
Multifactor Model
Option Pricing or Contingent Claims Pricing

8. Firm Valuation What determines the value of the Firm?
In a perfect capital market setting
In the “Real World”

9. Capital Structure What is the Capital Structure Decision?
What are the determinants of a firms’ capital structure
What do we have to consider?

10. Payout Policy What is payout policy? What are the Issues?
What factors are important?

11. Generally
We look to violations of Perfect Capital markets: In particular:
Costly Information
Taxes
Agency Problems
Failure to align managements with stockholders’ interest
Market for corporate control