Topics include valuation, capital budgeting, cost of capital, leasing, dividend policy, capital structure, and mergers and acquisitions. Areas studied include working capital management, liquidity policy, banking relations, investment in money market instruments and financial statement forecasting. Appropriate undergraduate courses in accounting and finance. Topics include alternative models for allocating resources among risky alternatives and evaluation of performance. Emphasis will be placed on mortgage instruments, mortgage types, effective cost of borrowing, construction lending, financial institutions, loan underwriting, and the secondary mortgage market.
Analysis is primarily from the debt investor's perspective.
May be repeated to a maximum of six credits. Topics include utility theory, investor reaction to uncertainty, cost of capital theory, dividend theory, portfolio theory, and asset pricing in equilibrium. Topics include capital budgeting, working capital planning, financing the firm, cost of capital and the financial structure of the firm, and mergers and acquisitions. Topics include mean-variance efficiency, development and testing of the capital asset pricing model, stochastic dominance, and option pricing theory as well as other topics in modern capital market theory. An examination of the role of financial institutions in the financial system and in the economy, with special emphasis on commercial banks.