Global MBA Program

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MAN560F2（経営学 / Management 500）
Financial Management

Yuta SEKI

Class code etc
Faculty/Graduate school Global MBA Program
Attached documents
Year 2022
Class code W7052
Previous Class code
Previous Class title
Term 秋学期後半/Fall(2nd half)
Day/Period 火6/Tue.6, 火7/Tue.7
Class Type 専門講義
Campus 市ヶ谷 / Ichigaya
Classroom name 各学部・研究科等の時間割等で確認
Grade 1・2
Credit(s) 2
Notes Global MBA
Class taught by instructors with practical experience ○
Category Specialized Courses

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Outline and objectives

In terms of financial management, corporate managers should be able to deal with two fundamental issues: (1) Selecting an investment project that maximizes the value of a firm, and (2) Choosing an appropriate financial policy (of dividend or capital structure) to persuade investors or banks to provide funds. This course aims at providing basic principles of corporate finance and investment theories. The course also covers topics such as concepts of net present values and cost of capital, valuation of debt instruments (bonds) and equities, firm valuation and portfolio theories. The course uses simple problem sets that require students to calculate net present values or to build models analyzing ROEs and other important ratios.

Goal

At the end of this course, students should be able to:
1.Understand key theories, principles and trends in corporate finance
2.Demonstrate effective approaches to the analysis of corporate finance structure and corporate financial statements, using applicable ratio analysis tools and techniques
3.Assess the practical application of models and theories to decisions on investment
4.Understand how investors evaluate corporations in the capital market and what corporate managers try to do to maximize their firm values.

Which item of the diploma policy will be obtained by taking this class?

Will be able to gain“DP1”,“DP2”,“DP3”and“DP4”.

Default language used in class

英語 / English

Method(s)（学期の途中で変更になる場合には、別途提示します。 /If the Method(s) is changed, we will announce the details of any changes. ）

1. Lecturing: Students will be asked to calculate problem sets on each chapter of the textbook or similar practices might be required
2. Case analysis: Students will be assigned to create and submit a brief report to analyze a certain publicly-traded company for applying financial models and for learning investment decision making methods intensively
(3. Sessions with guest speakers: Probable. Students might be required to submit response papers.)

Active learning in class (Group discussion, Debate.etc.)

あり / Yes

Fieldwork in class

なし / No

Schedule

授業形態/methods of teaching：対面/face to face

※各回の授業形態は予定です。教員の指示に従ってください。

第1回[対面/face to face]：Financial Management
Overview

A general guidance on the course method. Understand the basic concept of corporate finance and goal of corporation. In order to comprehend the role of financial management, discuss the relationships amongst corporate managers, shareholders, banks and other stakeholders.
Reading assignment: Desai Introduction, Chapters 1 and 3. Brealey, Myers and Allen (BMA) Chapter 1

第2回[対面/face to face]：How to Calculate Present Values

Understand the time value of money and the basics of net present value calculation
Reading assignment: Desai Chapters 1 and 2. BMA Chapter 2.

第3回[対面/face to face]：Valuing Bonds

Overview the variety of corporate financing methods. Understand the bond price calculation and the term structure of interest rate. Learn the basics of corporate bond and credit market
Reading assignment: Desai Chapters 1 and 2. BMA Chapter 3.

第4回[対面/face to face]：Valuing Equities

Overview the publicly-traded equity market. Understand the basic concept of dividends and cash flows, the valuation methods of equities such as Dividend Discount Model
Reading assignment: Desai Chapters 1, 2 and 3. BMA Chapter 4.

第5回[対面/face to face]：Financial Analysis (1): ROE (Return on Equity) and Value Creation

Understand the analytical tools on financial performance and profitability including ROE. Able to utilize various ratios.
Reading assignment: Desai Chapters 2, 4 and 5.

第6回[対面/face to face]：Financial Analysis (2): Free Cash Flows

Understand the difference between accounting and financial perspectives. Analyzing cash flows based on actual cases.
Reading assignment: Desai Chapters 2, 4 and 5.

第7回　[対面/face to face]：Cost of Capital (1): WACC and Optimal Capital Structure

Understand how to measure cost of equity and the concept of weighted average cost of capital (WACC). Understand the optimum level of debt and dividend payout. Discuss how capital structure impacts on firm values
Reading assignment: Desai Chapters 4 and 5. BMA Chapters 7, 8 and 9.

第8回[対面/face to face]：Cost of Capital (2): Risks Associated with Investment and CAPM

Understand the relationship between risk and return in the capital market. Understand the implication of beta as the expected return by the investor and the impact on the firm valuation
Reading assignment: Desai Chapters 4 and 5. BMA Chapters 7, 8 and 9.

第9回[対面/face to face]：Firm Valuation: Discounted Free Cash Flow Model and Alternative Models

Able to integrate various methods to evaluate a firm as a whole. Understand other valuation models and useful ratios.
Reading assignment: Desai Chapters 4 and 5. BMA Chapter 4

第10回[対面/face to face]：Capital Allocation and Payout Policy

Understand the basic decision making process of capital allocation. Discuss how payout (dividend and share repurchase) impacts on firm values
Reading assignment: Desai Chapter 6. BMA Chapters 12 and 16

第11 回[対面/face to face]：M&A and Corporate Restructuring

Understand the dynamics of M&A activities and how a leveraged buyout works in order for a private equity fund to capture the values created by turnaround
Reading assignment: Desai Chapters 5 and 6. BMA Chapters 31 and 32

第12回[対面/face to face]：Venture Capital and IPO

Understand the corporate growth cycle and the role of venture capital fund. Discuss the issues associated with pricing/valuations when a startup tries an initial public offering
Reading assignment: Desai Chapters 3 and 5. BMA Chapter 15.

第13回 [対面/face to face]：Corporate Governance

Understand the current issues on corporate control and governance by considering the asymmetric information problem and principal-agent model
Reading assignment: Desai Chapters 3, 4, 5 and 6. BMA Chapter 33.

第14回[対面/face to face]：Current Issues on Corporate Finance and Capital Market

Review key principles of corporate finance and discuss the recent issues of capital market such as ESG related debate.

Work to be done outside of class (preparation, etc.)

Those who are not familiar with the basics of finance and accounting would need some self-study to enhance the level of basic understanding. Lecture notes would be provided in the form of power point presentation. Please refer to the content in advance in going through the text to facilitate your understanding.

Textbooks

Mihir A. Desai, “How Finance Works: The HBR Guide to Thinking Smart about the Numbers” [Desai], Harvard Business Review Press (2019)
ISBN10: 1633696707
ISBN13: 9781633696709

Brealey, R., Myers, S., and Allen, F., “PRINCIPLES OF CORPORATE FINANCE” 13th Edition [BMA], McGraw-Hill, (2020)
ISBN10: 1260013901
ISBN13: 9781260013900


Lecture notes in a form of power point presentation would be provided in advance together with necessary cases.　

References

Jonathan Berk and Peter DeMarzo, “Corporate Finance”, 3rd Edition, Pearson (2013)
ISBN10: 0132992477
ISBN13: 9780132992473

Grading criteria

Final case assignment (material and presentation) : 50%
Quiz and interim assignments: 30%
Contribution to the class: 20%

Changes following student comments

Active feedbacks from the class are highly appreciated. Also the situations in corporate finance and capital market may vary between regions or countries. I would appreciate if you could bring insights or practical experiences in your home country into the class discussion.

Equipment student needs to prepare

Microsoft Excel is required to utilize financial models and simulations .