Erez Levy’s research and teaching interests are in the fields of empirical corporate finance and investments (In particular Fintech). His recent work covers a variety of topics such as the impact of investment horizon on investment decision and the effects of inversion. Professor Levy received his Ph.D. in Finance from Tel Aviv University. He also holds a B.A. in Economics, LL.B., and an M.B.A. Professor Levy received the Tel Aviv University Provost’s award for excellence in teaching in 2016 and received the Outstanding Professor of the Year award from the Coller School of Management, Tel Aviv University, in 2017-2020."
Finance II: Corporate Finance covers the financial knowledge you need to run a firm, whether the firm is a multi-billion international conglomerate or a three-person start up. You will learn how to answer the three fundamental question of corporate finance: (1) Capital structure or the funding decision: which source(s) of capital should you use to fund the firm's project? (2) Capital budgeting or the investment decision: which projects should you invest in? (3) Dividend decision: how should you deploy the capital that the project returns?
We will cover the three fundamental methods for valuing projects and firms: discounted cash flow (or net present value), real options, and multiples analysis. The class begins with a theoretical framework. The world of finance is very complex. Without a logical structure that you can use to frame and answer questions, you will rapidly become lost and will be unable to defend your position. The theoretical framework is valuable, however, only if you can use it to examine real world decisions. Thus the majority of class time will be devoted to applying the logical framework.
This course is important for anyone who plans to run a firm or a division, who hopes to be involved in the investment or funding decisions of the firm, who plans to work for a service provider who will assist the firm in analyzing these decisions (e.g., banking and consulting), or who plans to invest in firms or advise clients who will invest in firms. Even if you initially specialize in a different functional area, you want to understand how the finance function works. The most brilliant idea isn't useful if you cannot get it funded.
Recommended Prerequisites: ACCT-430 and MECN-430
Finance 1 answers managers' and investors' most fundamental finance question: how should a project or an asset be valued? Managers must determine the value of building a factory, entering a new market, or purchasing an entire firm when deciding in which projects to invest. Similarly, individuals must assess the value of financial securities to decide how to invest their wealth. Using a combination of lectures and business cases, Finance 1 teaches the discounted cash flow and multiples methods to value projects or assets. These valuation tools lay the foundation for all work in capital markets and corporate finance.
Prerequisite: Business Analytics I (DECS-430-5)
Corequisite/Prerequisite: Accounting for Decision Making (ACCT-430) and Business Analytics II (DECS 431-0)