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					                                              Queens College
                                                 Fall 2008

Course:     Corporate Finance - Bus. 241 3 cr. 4 hrs. (3 hrs lecture, 1 hr Excel lab)
Instructor: Jeffrey Farber Office hours: T, Th 5:30-6:20pm, Powdermaker rm 300
Reading:    Fundamentals of Corporate Finance, 5th Ed. Brealey, Myers and Marcus (An inexpensive
            custom-made version covering only the chapters for the course is available at our

            Excel Modeling and Estimation in the Fundamentals of Corporate Finance, 3rd Ed. Craig W.
            Holden ISBN 13: 978-0-13-207989-1 Buy a new copy either at our bookstore or online to be
            sure that you get the diskette that comes with the book.

            I will email to you through Blackboard two or three articles from journals relevant to the
            course material. You must call O.C.T. and tell them to link your school email address to
            Blackboard otherwise you won’t receive them and you’ll have to access them yourself from
            the library database.

The material will be presented using PowerPoint slides. The Brealey website (www.
has the slides for download for your personal use. (Adjust your printer settings for six slides per page,
not one, otherwise you’ll run out of ink)

Approximate scheduling is as follows:

            Weeks 1 to 3: Overview of the Corporation. Its goals, structure and major decisions.
                          Purposes of financial markets and institutions.
                          Review of Accounting and its relationship to Finance.
                          Brealey chapters 1 to 3.
                          Article: Corporate Objectives – Maximizing Social vs. Private equity
                          Excel basics

            Weeks 4 to 6: The Time Value of Money: present value, future value, annuities, and
                          perpetuities. Compound interest, effective annual interest rates and inflation
                          and interest rates. Mortgages.
                          Brealey chapter 4
                          Excel chapters 1 to 5.

            Weeks 7 to 8: Bonds: Interest rates and prices. Coupons. Yield to Maturity. Required
              return to bondholders.
              Brealey chapter 5
              Excel chapter 6.
              Midterm exam.

Weeks 9 to 10: Stock Valuation: Dividend Discount Model. Estimating growth rates using
               plowback ratios and return on equity. Present value of growth opportunities.
               Article - Stock Valuation Using Fair-Value Accounting data.
               Brealey chapter 6
               Excel chapter 8

Weeks 11-12: Net Present Value, Internal Rate of Return, Equivalent Annual Annuity.
             Cash Flow vs. Accounting Income, Capital Budgeting, Discounted Cash Flow
             Article - Information that Boards Really Need
             Brealey chapters 7 and 8.
             Excel chapter 11

Weeks 13-14: Sensitivity analysis. Scenario analysis. Breakeven analysis by Net Income
             and Net Present Value.
             Brealey chapter 9
             Excel chapter 12
             Final exam