1. Managerial Finance Professor Nisan Langberg

2. Welcome Nisan Langberg nlangberg@uh.edu Office 210E Teaching Assistant Eshwar (Buvaneshwaran Venugopal) eshwar.gokul@gmail.com

3. Goal Equip students with the basic tools necessary for making efficient financial decisions while taking into account future cash flows and their risk. Methodology Students will master the required theoretical tools and apply them to day-to-day decision of individuals (saving/retirement/mortgage…)

4. outline Logistics Course schedule

5. Logistics

6. Class Material On our website http://www.bauer.uh.edu/nlangberg/teaching_635.htm

7. Text book I will teach and assign problems using the book Corporate Finance by Jonathan Berk and Peter DeMarzo, Perason

8. Alternative Reading Further/alternative reading is Brealey, Myers and Allen, Principals of Corporate Finance, McGraw-Hill Irwin, 8 th edition or higher

9. Buying the book? I do recommend buying the book The course is built around the text book Excellent reference book for those to plan to work in the area of corporate finance Taught in leading B schools around the world

10. Group Assignments I encourage work in groups Groups are limited to four students

11. Grade Homework assignments: 20% Quizzes: 20% Final exam: 60%

12. Office hours 5pm before class or by appointment welcome to stop by my office (210E) Send specific questions by email

13. Course Schedule (tentative)

14. Course schedule Wednesday and Thursday classes August 26/27 Introduction Time value of money (chapters 3.1-3.3 and 4) Future value present value discounting stream of cash flows September 3/4 Time value of money continued Annuities, perpetuities, growing annuities and growing perpetuities Saving for retirement Mortgage

15. Course schedule September 16/17 Review of Time value of money with TA Review of basic discounting principals Solution of homework questions in class Additional advanced practice questions Quiz 1 September 9/10 Interest rates (chapter 5) APR, EAR, Amortizing loans Nominal and Real interest rates The Term Structure of Interest Rates Basics of Bond Valuation (chapter 6) Type of bonds Structure of bonds Valuation Practice questions CH3,4 due

16. Course schedule September 23/24 Investment Decision Rules (chapter 7) NPV, Payback period, IRR, EVA Multiple investment opportunities Resource constraints, Profitability Index Practice Questions CH5/6 due September 30/October 1 Stock Valuation (chapter 9) Investing in stocks The Constant Dividend Growth model The dividend and growth tradeoff Changing growth rates Application: ebay Practice questions CH7 due

17. Course schedule (Additional class) October 3 9:00-12:00 (classroom TBD) Pricing Risk (chapter 10) Risk and return Expected return, Volatility Calculating realized returns Excess returns Systematic and Idiosyncratic risk Diversification CAPM October 7/8 Review of final Review of material sample exam Students’ questions October 15/16 Final Exam 6:00-9:00

18. Questions before we start?