This course provides a comprehensive examination of selected corporate finance issues. It focuses on the design of financial policy, financial transactions and the valuation of firms, both in the United States and internationally. Topic areas include the measurement of the cost of capital, capital budgeting, project valuation, costs of accessing public securities markets, risk management and securitization, the effects of information and control costs on contract design, valuation of real options, corporate payout policy and capital structure, highly levered transactions, the market for corporate control, financial distress and debt restructuring in bankruptcy. Corporate governance topics include: the role of the board of directors, executive compensation, fiduciary duties, the market for corporate control, regulatory intervention and the Sarbanes-Oxley Act. Governance systems and case examples in Japan and Germany are explored. Evidence of earnings management from research studies and the effect of options on earnings ‘management’ are also discussed. Relevant cases discussed include: USX Corporation and Livedoor.
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