This course analyzes the major financial decisions facing firms. While the course takes the perspective of a manager making decisions about both what investments to undertake and how to finance these projects, it will emphasize the underlying economic models that are relevant for these decisions.Topics include capital budgeting, links between real and financial investments, capital structure choices, dividend policy, and firm valuation. Additional topics may include issues in corporate risk management, corporate governance and corporate restructuring, such as mergers and acquisitions. In the fall of 2020, special consideration will be given to how both financial and real economic shocks interact with firms’ financial decisions.
Format: lecture; Lecture / discussion; in the fall of 2020, some weeks we will meet for one 75-minute section (in person when possible) and break into smaller groups for one hour section groups (most likely remote). The timing of the sections will be arranged at the beginning of the semester.
Grading: yes pass/fail option,
yes fifth course option
class participation, problem sets, short quizzes, short projects such as case write ups, a midterm exam, a final exercise and a research paper (possibly written with a partner)
ECON 251, 252, and some familiarity with statistics (e.g., ECON 255)
Senior Economics majors
The course uses quantitative models to evaluate decisions.