SEMESTER: Spring 2019

This course is dual listed with the Evening-Weekend MBA program.

COURSE NUMBER: MBA 231-3

COURSE TITLE: Corporate Finance

UNITS OF CREDIT: 3 Units

INSTRUCTOR: Ulrike Malmendier

E-MAIL ADDRESS: ulrike@econ.berkeley.edu

PREREQUISITE(S): MBA203 Intro to Finance and accounting (MBA 202)

CLASS FORMAT: The class is based on case discussions and also comprised some lectures.   

REQUIRED READINGS: 
The main focus of class preparation will be the case or cases to be covered in class.
In addition, two “standard” corporate finance books will be used: 
(1) J. Berk and P. DeMarzo, Corporate Finance, 4th ed., Pearson, 2017
(2) R.C. Higgins, Analysis for Financial Management, 11th ed., Irwin, McGraw-Hill, 2015
For modern “behavioral” corporate finance approaches, I will distributed original research. In addition, a helpful source is
 (3) H. Shefrin, Behavioral Corporate Finance, 2nd ed., Irwin, McGraw-Hill, 2017

BASIS FOR FINAL GRADE: Final, cases, class discussion

ABSTRACT OF COURSE'S CONTENT AND OBJECTIVES:
The classes teaches the key concepts in corporate finance, with an emphasis on modern behavioral finance approaches. Topics include Cash Flow Management, Capital Structure and Financing Needs, Project and Company Valuation (including Real Options), which are taught from the viewpoint of the CFO (or financial decision-maker) in an established firm or start-up. We assume that the CFO’s job is to maximize firm value and deal with three types of decisions: which projects to invest in, how to finance that investment, and how to manage the cash flows of the firm. We consider managerial biases that might hamper financial decision making, including CEO overconfidence, sunk-cost fallacy, and hindsight bias, and discuss so-called corporate repairs. This is an applied course, that will primarily use case studies to introduce financial tools needed to make value-enhancing business decisions.

CAREER FIELD: All Career Fields

BIOGRAPHICAL SKETCH:
Ulrike Malmendier is the Edward J. and Mollie Arnold Professor of Finance at the Haas School of Business and Professor of Economics at the Department of Economics at UC Berkeley. She has taught at Haas since 2013, and has previously taught MBA and Executive MBA classes at the Stanford GSB and Harvard Business School, as well as Ph.D. and undergraduate classes in behavioral economics, behavioral finance, and corporate finance. At Berkeley she has won the campuswide Distinguished Teaching Award in 2015. She is also the 2013 winner of the Fischer Black Medal, awarded biennially by the American Finance Association to the leading finance scholar under the age of 40. Some of her most-cited research includes publications on CEO overconfidence and their effect on merger, investment, and capital structure decisions, as well her research on “experience effects,” a term she coined to describe the long lasting impact on personal lifetime experiences on individuals’ willingness to take risk, .e.g., among “Depression Babies” or among citizens growing up in a non-market economy. Malmendier received her Ph.D. in Business Economics from Harvard University in 2002 and her Ph.D. in Law from the University of Bonn in in 2000.  She is a frequent keynote speaker in the financial industry as well as academic conferences, member or chairperson of several advisory boards.