Corporate Finance and Accounting

Finance has become an integral part of economics, as shown by the number of Nobel Prizes awarded in recent years to scholars who have made contributions to the field. This course will focus on the financial side of the modern corporation, for the stakeholders as well as the shareholders. We will start with financial accounting as a means of measuring the health of a company and of discerning the transparency and accuracy of its financial statements. (As Enron and other companies showed, it pays to be skeptical.) We will then move to strategic planning and the growth of the firm, and to decisions on how to finance that growth as between equity and debt. We will conclude with valuation models based on cash flow. At the end we will hold a buy-side sell-side competition, in which students work in teams to value real companies and present them to the class as attractive investments. (ECON 0150 and ECON 0155) 3 hrs. lect., 1 hr. lab