Merck

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UNIVERSITY OF WASHINGTON
Graduate School of Business Administration
Finance 553

CAPITAL INVESTMENT PLANNING
Winter 2003

Professor Robert C. (Rocky) Higgins
306 Mackenzie Hall
Tel: 543-4379
E-mail: rhiggins@u.washington.edu
Homepage: http://us.badm.washington.edu/higgins/
(From here you’re one click from the class page)
Office Hours: M, W: 10:30 – 12:00

COURSE OBJECTIVE

Capital Investment Planning is a case course examining corporate investment decisions and related issues in financial strategy. The course is intended as a continuation of Finance 552, Corporate Planning and Financing, and is suitable for generalists and finance specialists who seek a solid grounding in corporate financial management. Finance 555 may be substituted for Finance 552 as a prerequisite. Principal topics include: use of discounted cash flow analysis to evaluate investment opportunities, estimating capital costs, or discount rates, capital budgeting systems and their affect on resource allocation decisions, valuing a company or division, merger analysis, corporate restructuring including leveraged buyouts, and issues in financial strategy.

When you complete this course, you should be able to:

Estimate an investment’s relevant costs and benefits

Estimate a company's weighted-average cost of capital and understand its role in investment decision making

Use discounted cash flow techniques, decision trees, and simulation to analyze investment opportunities

Value (i.e., put a price tag on) companies and divisions

Analyze private equity and highly leveraged investments

Understand the major issues in the ongoing debate over corporate governance

Spot opportunities in which financial restructuring can create value

Use valuation techniques to analyze strategic business alternatives

REQUIRED MATERIALS

1. Copeland, Tom, Tim Koller, Jack Murrin,…...

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