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Applied Corporate Finance:



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Seminar on Applied Corporate Finance

Prof. Ian Giddy
New York University



Goals
This 2-day applied finance module will offer an insight into applied corporate and investment finance with the objective of identifying and solving corporate finance problems using the latest practical and analytical techniques. Using real-world case studies for participants to work cooperatively on, the course will introduce the key principles of selecting financial and real investments, financing them, extracting value and managing financial risk.

Beginning with the premise that the goal of management is to increase the value of the firm or financial institution, we will walk through the key decisions - investment, financing and risk management - that contribute to shareholder value. The investment side will include equity and fixed-income portfolio selection and management decisions, capital investments under risk, and M&A. The financing side comprises decisions about capital structure - how much debt, relative to equity, is optimal for a particular firm - as well as decisions about what kind of debt, and what kind of equity, is right for the firm. Both investment and financing decisions are tied to financial risk management, including the choice of hedging instruments, so the third leg will offer guidelines for the measurement and management of interest rate, equity, and currency risk. The seminar will conclude with an analysis of how companies can improve value and profitablity

Instructor
Prof. Ian Giddy lectures on finance at New york University's Stern School of Business. He is a graduate of the University of Michigan (MBA 1972, PhD 1974) and the University of the Witwatersrand (BSc 1970). He has taught finance at NYU, Columbia, Wharton, Chicago and abroad for the past twenty-two years. He was Director of International Fixed Income Research at Drexel Burnham Lambert from 1986 to 1989. He is the author or co-author of numerous articles and books, including The Handbook of International Finance, The International Money Market, Cases in International Finance, Global Financial Markets, Asset Securitization in Asia and The Hudson River Watertrail Guide.


Course Structure and Highlights
 

Day 1

Morning:

  • Applied corporate finance
    • The decisions that create shareholder value: Investment, financing, payback and risk management
    • Economic Value Added and related concepts
    • The goals and constraints of financial managers
    • Managers’ vs Owners’ Interests: The Agency Problem
    • Corporate Governance and the Market for Corporate Control
  • Evaluating Investments and the Cost of Capital
    • Risky investments and the cost of capital
    • Capital asset pricing model and a company's beta
    • How to measure a company's cost of equity
    • How to find a company's cost of capital
    • Application to investment evaluation
    • Time Value of Money
    • Risk Value of Money
    • Making Real Investment Decisions
    • Capital Budgeting
    • The International Dimension
    • In-Depth Case Study
Afternoon:
  • Principles of Corporate Financing
    • Finding the optimal capital structure: debt, equity or mezzanine?
    • Corporate taxation and capital structure
    • Leverage, ratings and the cost of debt
    • How to find the optimal debt ratio
    • Case Study: SAP Company
  • Designing Debt
    • From "How Much Debt?" to "What Kind of Debt?"
    • Public vs private; domestic vs international; long-term vs short term; fixed vs floating
    • Currency of denomination
    • Hybrid debt instruments
    • Case Study: Financing Ciba
Day 2

Morning

  • Risk Management: Corporate Applications
    • When Should Companies Actively Hedge Financial Risks?
    • Defining and Measuring Financial Risk
    • Measuring Foreign Exchange Exposure
    • Managing Foreign Exchange Exposure
    • Tools and Techniques of Hedging: Derivatives such as Futures, Options and Swaps
    • Case Study: Paretti Textiles
    • What Can Go Wrong, and Why
    • Interest rate risk management
    • Commodity price risk management
    • Hedging using derivatives and structured notes
    • Case study: LQM
Afternoon:
  • Creating corporate value through financial restructuring
    • Use of leverage and equity transitions
    • Principles of merger, acquisition and divestiture restructuring
    • Company research and valuation based on financial statement analysis and understanding the business and competitive situation, cost structure, etc.
    • Bringing an IPO deal to market
    • The corporate financing choice: Debt, equity or mezzanine?
    • Structure and use of the international  equity and bond markets
    • Bank financing, bonds, common stock vs convertibles, warrants, index-linked securities, etc
    • Financing and corporate volatility
    • Case Study: Rinol
    Recap and summary of the seminar



Background Materials
Background Materials on Corporate Finance may be found at the following website:
http://giddy.org/ibmfinance/finmat.htm
Excel spreadsheets for Corporate Finance and Valuation may be found at:
http://giddy.org/ibmfinance/spreadsheets.htm
A sample Excel spreadsheet for the valuation of a merged company may be found at:
http://giddy.org/dbs/ipoh.xls


 
Related websites:

giddy.org
giddyonline.com
financefixit.com
globalsecuritization.com
asiansecuritization.com
 
giddyonline.com
119 West 82nd Street
New York, New York 10024

Tel.212-998-0332
Fax 917-463-7629
seminars@giddyonline.com


Go to Giddy's Web Portal • Contact Ian Giddy at ian.giddy@giddyonline.com