Brian Melzer is an adprofessor in the Finance Department. He studies household finance, with a particular focus on household borrowing, housing investments, and financial advice. His work has examined the impact of payday loans on household well-being, the default and investment behavior of heavily indebted homeowners, and the effects of unemployment insurance on loan default and credit supply. His current research examines the costs and benefits of financial advice. His articles have been published in leading economics and finance journals such as the Quarterly Journal of Economics, the Journal of Finance, and the Review of Financial Studies.
Professor Melzer received a Ph.D. in Economics from the University of Chicago Graduate School of Business in 2008. Prior to pursuing his Ph.D., he received undergraduate and master's degrees in philosophy from Princeton University and the University of St Andrews. He also worked as a research analyst in investment management.
Household finance; real estate; financial institutions; financial regulation
**This version of Finance II is designed for students who took Finance I during or after Fall 2014**
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