David Matsa is the Alan E. Peterson Distinguished Professor of Finance at the Kellogg School of Management, Northwestern University, and a Research Associate at the National Bureau of Economics Research.
He has published widely in finance and economics. Much of his research focuses on connections between the labor and financial markets from both corporate and household perspectives. On the corporate side, he studies how human capital affects firms’ evaluation and funding of investment projects. And on the household side, he studies how job and financial market instability affect worker’s financial resilience, where they work, and how they live. Professor Matsa’s recent research on corporate governance examines the determinants and effect of gender diversity among corporate directors and executives. His articles have appeared in leading journals, including the American Economic Review, the Quarterly Journal of Economics, the Journal of Finance, and many others.
On the Kellogg faculty since 2006, Professor Matsa teaches corporate finance and a seminar on business & society in Kellogg’s MBA program. He has served on the editorial board of the Journal of Finance and has received numerous research and teaching awards. Professor Matsa worked as a consultant at McKinsey & Company and received his Ph.D. in Economics from the Massachusetts Institute of Technology.
Corporate Finance, Corporate Governance, Labor Economics, Industrial Organization, Regulation
Corporate Finance, Corporate Governance, Business & Society
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