Ronald F. Singer
Introduction Lecture 1
• Instructor: Ronald F. Singer
• Phone: 713-743-4771
• Office Hours: Tuesday, 4:45 to 6:00 and
Thursday, 4:00 to 4:45.
• Room 210F Melcher Hall
• Webpage: www.bauer.uh.edu/singer
• Late Entrants
• Reading, Eating, etc.
– Ross, Westerfield and Jaffe, Corporate
Finance, 9th edition
– Wall Street Journal
Review of Principles of
• Three areas of inquiry
• Efficient Markets versus Perfect Capital
• What is to be discounted?
• How do we discount?
• What is the decision rule and why?
What determines the value of
• Security Pricing Models
– Capital Asset Pricing Model (CAPM)
– Arbitrage Pricing Model (APT)
– Multifactor Model
– Option Pricing or Contingent Claims Pricing
• What determines the value of the Firm?
– In a perfect capital market setting
– In the “Real World”
• What is the Capital Structure Decision?
• What are the determinants of a firms’
• What do we have to consider?
• What is payout policy?
• What are the Issues?
• What factors are important?
• We look to violations of Perfect Capital
markets: In particular:
– Costly Information
– Agency Problems
• Failure to align managements with stockholders’
• Market for corporate control