Overview
The concentration in Corporate Finance, through its courses, teaches a core set of skills in financial modeling, debt and equity issues, valuation, mergers and acquisitions, financial planning, risk management, financial reporting and analysis, and taxation necessary in corporate finance positions as well as in other careers such as consulting.
Our students develop the skills and knowledge base to undertake positions in:
- investment banks and commercial banks
- corporate finance, treasury, and business development positions in Fortune 500 and mid-cap companies
- financial consulting, general management consulting, and corporate strategy roles
- venture capital and private equity firms, and
- general management positions
At UNC Kenan-Flagler, we routinely place about a quarter of our top graduates in corporate finance: investment banks, corporations, and venture capital. The investment-banking component of corporate finance placement has historically been around 15% of our hiring. Another important placement for students is in corporate finance consulting positions. We also commonly place graduates into industry finance and commercial bank positions through our alumni network.
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Senior Advisory Board
The Corporate Finance concentration relies heavily on input from its senior advisory board. Their advice on curriculum issues, student training, and their involvement in placement facilitates continuous improvement for the Corporate Finance concentration in response to changing market dynamics. Board members are also frequent guest speakers in classes. We organize activities in Charlotte and New York, the two locations where most of our corporate finance alumni are based.
Members of the MBA Corporate Finance Advisory Board are:
- Anil Shivdasani - Wachovia Distinguished Professor of Finance, former Managing Director, Citigroup
- John Binnie - Managing Director, Moelis & Co.
- Brent Callinicos - Treasurer, Google
- Paul Parker - Head of Global M&A, Barclays Capital
- Gary Parr – Deputy Chairman, Lazard
- Geoff Chatas – Chief Financial Officer, The Ohio State University
- Mike Jacobs – CEO, Jacobs Capital
- Jon Yourkowski – Managing Director, Morgan Stanley
- Stephen DeMay – Treasurer and Executive Vice President, Duke Energy
- Marc Zenner – Managing Director, JP Morgan
Concentration Requirements
Required Courses
Fundamental Principles of Corporate Finance
Fundamental Principles of Corporate Finance is a more advanced course in corporate finance theory and policy. The aim of the course is to rigorously analyze the major issues affecting the financial policy of a modern corporation, such as the choice of its capital structure, dividend policy, share issuance and repurchase and corporate governance system. We will critically discuss costs and benefits of the strategies available to a firm’s top management to address these issues effectively. The course will also examine private equity and venture capital, and the process of raising capital through IPOs and SEOs. The course will conclude with a discussion of the role of corporate financial risk management. Classroom presentation will be mainly theoretical, but will illustrate the main concepts with examples drawn from the real world. Exposition will be analytical, and a working knowledge of basic mathematics and statistics is assumed.
Prerequisites: BA 280A, BA 280B
*This course is limited to first-year students
Financial Statement Analysis
Financial Statement Analysis seeks to provide you with an applied perspective on analyzing financial statements. By the end of the course, the successful student will be well on their way to mastering several skills:
- Earnings management. You’ll understand how and why managers can move earnings up and down using accounting discretion, and how you can detect and adjust for this.
- Profitability analysis. You’ll know how to decompose a firm’s overall profitability into its key elements, so that you can tell whether the firm is really making money or losing money; where this is happening; and why it is happening.
- Statement analysis. You’ll learn how to pull apart and understand a firm’s financial statements + footnotes so that its major business economics are more clearly visible.
- Credit analysis & predicting financial distress. You’ll be able to evaluate how close a firm is to being in financial distress, and how creditworthy it is.
FSA is designed to be particularly useful for finance-oriented first year students preparing for summer internships. The course is also valuable to second years looking at consulting, corporate finance, entrepreneurship, general management, investments, and marketing careers. The course complements, not repeats, material in related courses such as Financial Accounting, Taxes in Finance, Topics in Advanced Financial Reporting, and Complex Deals.
Elective Courses
Mergers and Acquisitions
Mergers, Acquisitions and Corporate Restructuring have a dramatic impact on most corporations. Many managers will either directly or indirectly face the challenges brought on by these changes in corporate structure. These mergers that induce change provide an opportunity for gaining insight into key corporate issues.
The objective of this course is to learn the financial techniques to analyze the valuation and structuring of corporate mergers and acquisitions, with an application of financial theory to solve a set of case studies in strategic decision areas. Students will form study groups to examine and analyze assigned cases for class discussions.
Real Estate Process
The Real Estate Process introduces students to the basic concepts of real estate. This course provides a background on the concepts of urban and spatial economics, analysis of markets, valuation, law, development, capital markets and investment analysis. It also familiarizes students with the vocabulary of real estate and exposes them to real-world decision making processes through a series of case studies. Students in this course will build the foundation needed to be successful in the highly competitive summer internship job market.
or Real Property Decisions
This course is designed to provide students with the ability to both understand the issues which are currently important in the real estate industry, and to understand the process by which participants in the market make “micro-oriented” decisions related to these issues. In real estate markets, these decisions typically are made by individual investors, but the markets are becoming more dominated by institutions like life insurance companies, pension funds and other non-local investors. This creates some interesting relationships in what has always been a market in which local market information is critical, but often difficult to obtain.
We will focus mainly on the intuition and inputs needed to make informed decisions at the individual asset level. These decisions require a background in real estate market analysis, law, valuation, finance, investment, management and a variety of other topics. This course is designed to be a survey course which covers a broad range of issues. We will not have time to delve too deeply into any of these areas. This course seeks to develop a real estate mindset through a focus on intuition and analysis. The coverage of these topics will provide a general background that can be applied to a broad range of real estate decisions. As with many things in the financial and capital markets, every real estate deal is a story and understanding which pieces of the story are important is a critical aspect of real estate decision making.
A large part of the success in this course depends on student participation. We will analyze a number of cases during the semester and for each, student preparation is critical. After the class presentation of the case, students will write up a brief, two page summary of the case findings and what was covered in class. In the past, these case summaries have been useful in studying for the final exam. Students interested in developing, investing and financing real estate are encouraged to take this course.
Prerequisites: MBA 214, 215, 216
*This course is offered only to second-year MBA students.
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Real Estate Capital Markets
Real Estate Capital Markets focuses on the techniques used to analyze, finance and structure commercial real estate transactions. This course also examines the role of capital markets in facilitating development and investment in commercial real estate. Topics include an overview of the real estate space and capital markets and valuation; investment analysis for real estate equity investment, including financial structure, taxation and valuation using real-option methodology; primary and secondary commercial mortgage markets (CMBS); and analysis of publicly traded real estate investment trusts (REITs). The course provides a decision-making framework that gives students an in-depth and intuitive understanding of real estate finance, real estate investment and the operation of real estate capital markets.
Prerequisites: Finance 214
*This course is limited to second-year Real Estate Concentrations or by permission of instructor. *This course is not computer-supported.
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Private Equity
This course will examine all sources of private capital available to those wishing to buy a business, refinance a business or start a business. We will start by looking at where these funds originate, the criteria that the source of funds have for the fund managers who capitalize business. Then we will examine the type of funds available: private equity, mezzanine debt, hybrid funds, workout funds, venture capital, etc. We will examine how each decide the type of investments they fund, the method for getting these funds for your project, the right type of funding for your venture, the returns each source of capital expects, how much capital in each fund is available world-wide and how to negotiate the best deal.
We will start with a discussion of where funds come from, the institutional fund market, the role of the gatekeepers, the funds themselves and the current trends of each. This course is for students going to work for Venture Capital., Private Equity, Hedge Funds, Distressed Debt, or Mezzanine Debt funds, Investment Banking, Consulting, or for students who wish to start, buy or grow a business.
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Topics in Advanced Financial Reporting
This course will show students how to account for stock options, income taxes, pensions, leases, derivatives, financial instruments, and asset securitizations. The focus will be on enabling students to extract information from financial statement disclosures, including footnotes, for purposes of equity valuation and financial statement analysis. Many of the topics covered in the course relate to accounting standards that have been both controversial (e.g., the pension and stock option standards) and are currently being reconsidered by the FASB and their international counterpart, the IASB (e.g., asset securitizations). The course will draw on current deliberations by accounting standard setters, and will help students understand the political landscape of standards setting in relation to prominent and controversial events in the financial markets, such as the mortgage market collapse. The course is highly recommended for students concentrating in corporate finance or investments, and complements several electives in accounting and finance including equity valuation and financial statement analysis. The course covers several accounting topics that are also on the CFA exam.
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Taxes in Finance
Part of being financially savvy is having an understanding of how taxation affects business decisions, e.g., forming a corporation and raising capital, operating the firm, distributing cash to shareholders through dividends and share repurchases, expanding through acquisition, and divesting lines of business. Taxes have a direct impact on cash flow and often divert 30% to 40% of the firm's pretax cash flow to the government, making the government the single largest stakeholder in many firms. Having an understanding of taxation and how firms plan accordingly is important for just about any career path you choose, whether you will be a an investment banker, venture capitalist, consultant, money manager, CFO, treasurer, controller, taking over a family-owned business, or as an entrepreneur setting up a new business. Taxes are everywhere and it pays to have some understanding of them.
A recurring theme will be linking the tax strategies that we learn with concepts from corporate finance, financial accounting, business law, and economics. We make extensive use of real transactions to illustrate the impact of tax structure on earnings and cash flow. I think you will find that people who understand the tax consequences and trade-offs of decisions have a distinct advantage in the marketplace.
Specific topics include:
- Tax planning fundamentals
- Taxation of corporate operations and financing
- Tax information in the financial statements
- Taxation of mergers and acquisitions
- Taxation of divestitures
- International taxation
- High wealth tax planning
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Complex Deals
This course develops sophisticated users of financial information. The ability of students to read and utilize information in corporate financial statements and to understand the economic essence of important classes of complex business transactions will dramatically increase. The course applies insights from financial economic theory to explore important issues of corporate governance, organizational design, risk management and managerial incentives and behavior. Many fascinating deals and transactions will be examined, focusing on understanding the economic underpinning of a transaction and its accounting representation in the firm's financial statements. The course approach strips away all unnecessary bookkeeping to focus on grasping the transformation of economic events into accounting information. The material encompasses many recent developments in the world, including cutting edge research findings not yet reflected in existing textbooks, recent accounting scandals or international developments.
The course will benefit a number of constituencies, including bankers, strategy consultants and deal makers who must understand the economic and accounting implications of varying a deal's structure or make valuation estimates using accounting information; investors and analysts who rely on financial information to guide investment decisions; and corporate managers who must achieve financial reporting objectives, or use financial statement information in formulating strategies and discerning the strategies and situations of competitors.
The course format involves a mixture of lecture and case discussion. Grades will be determined on the basis of four exams spread evenly over the course.
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Introduction to Derivatives
The course provides an introduction to the primary instruments of the derivative securities market. Emphasis will be placed on real-world applications of theoretical (or conceptual) material discussed in class. After developing the ideas of static and dynamic arbitrage, the course ends with five lectures applying the basic concepts to different business settings, from capital budgeting to risk management. The course is particularly important for anyone going into finance, but stress will be given to topics that are of relevance for general managers. Topics covered include no-arbitrage-based pricing; binomial option pricing; the Black-Scholes model; practical issues with Black-Scholes model; the pricing of futures and forwards; hedging with derivatives; portfolio insurance; equity and debt as options; real options.
- Applied Derivatives
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Investment Banking
This course is designed to prepare first-year MBA students for investment banking internships. The main focus of the class is on financial modeling. The first two classes consist mostly of preparation for the financial modeling workshops (led by the class Teaching Assistants), and last for approximately three hours. There are six four-hour workshop sessions. These workshops are led by Scott Rostan, founder and CEO of Teaching the Street, a company that provides financial modeling instruction to a number of major investment banks. Areas to be covered are financial analysis and projections, use of comparables, valuation methods, etc. We will learn about topics including income statements, balance sheets and cash flow statement projections; depreciation, amortization and working capital schedules; public company comparables analysis; discounted flow analysis and valuation; and recent events concerning investment banking. In feedback from the major investment banks, we are consistently told that financial modeling is the most critical area to master before IB internships.
The secondary emphasis of this course will be on general knowledge of investment banking and what it takes to succeed as an IB professional.
The class will meet for one 1½ hours on those days when the Rostan-led workshops are not scheduled. We plan to have several prominent bankers and corporate executives as outside speakers. If needed, some of the regular classes are scheduled as financial modeling review/practice sessions. The course is graded pass/fail.
The primary target for this course is first-year MBAs with IB internships. The course has also proven helpful to MBAs with corporate finance internships or jobs.
Prerequisites: none
*First-year MBAs are given preference for admission to this class but second-year MBAs are eligible.
*this course is computer-supported, e.g. using computer simulation, special databases, and other high-tech components.
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Applied Corporate Finance
The objective of this course is to learn how to resolve real corporate finance problems with the help of analysis, theory and judgment and in the context of a corporation's business strategy. Topics include valuation, capital structure, dividends, share repurchases, raising capital, financing and applications of options in Corporate Finance. This is a case study-based course, and students will form study groups to examine and analyze case studies for each topic covered in the course.
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Investments
The objective of this course is to undertake a rigorous study of the theory and empirical evidence relevant to investment management. It will introduce you to the characteristics of various financial securities and discuss the risks and rewards associated with them. Topics covered include optimal portfolio selection and asset allocation, the theory of asset pricing models, market efficiency, behavioral finance, the mutual fund and hedge fund industry, as well as techniques for evaluating investment management performance. Much of the course is devoted to common stocks, but other investments, especially fixed-income securities and derivatives, will be included. The course does not cover individual security selection and valuation.
The course is fairly quantitative. Students who master the course material will acquire the analytical tools and theoretical concepts necessary for making good investment decisions and understanding the paradigms by which financial securities are valued.
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Global Financial Markets
This course develops the foundations for financial decisions in a global economic environment. It concentrates on four areas: markets, tools, corporations, and investment. The course analyzes the functioning of international financial markets and institutions and addresses the management of foreign exchange exposure in international corporations. The course continues by considering the valuation of international investments and the opportunities for international corporations in global debt and equity financing, e.g. in emerging markets. Finally, the course concludes with the benefits of global diversification in investment strategies.
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Governance and Financial Accountability
In this course you will receive a high level overview of the forces that impact financial decision making and reporting. The roles of boards, shareholders and government entities in governing corporations will be examined. Some of the questions that will be explored through readings, case discussions and guest speakers include the following:
- What qualities make a board effective, and what are the roles of various board committees?
- How are public companies governed differently from private companies, and why is private equity growing so rapidly?
- How does executive compensation influence managerial decisions?
- What is the legal and regulatory framework governing financial decisions and reporting?
- Why do financial scandals crop up in some companies and not others?
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Fixed Income
The objectives of this course are to describe important fixed income securities and markets, and develop tools for valuing fixed income securities and managing interest rate risk. The course will cover US treasury securities, the term structure of interest rates, the zero-coupon yield curve, duration and convexity concepts. In addition to repurchase agreements, forward rate contracts and other fixed income contracts, the course also covers recently developed fixed income derivatives such as credit default swap contracts (CDS) and their valuation techniques recently employed in practice.
- Behavioral Finance
Who's Teaching
Robert Bushman
Jennifer Conrad
John Hand
Scott Rostan
Ed Maydew
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