Behavioral finance economics 437 spring 2009 professor burton
Sponsored Links
This presentation is the property of its rightful owner.
1 / 10

Behavioral Finance Economics 437 – Spring 2009 Professor Burton PowerPoint PPT Presentation


  • 73 Views
  • Uploaded on
  • Presentation posted in: General

Behavioral Finance Economics 437 – Spring 2009 Professor Burton. March 2008 Oct-Nov 2008 April 2009. Class on Sunday 2PM – 4PM Picnic, Friday, 4PM Apr 24th. Balance Sheet XYZ Corp As of March 31st, 2009. Assets.

Download Presentation

Behavioral Finance Economics 437 – Spring 2009 Professor Burton

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Behavioral FinanceEconomics 437 – Spring 2009Professor Burton

March 2008 Oct-Nov 2008 April 2009

April 16, 2009


Class on Sunday2PM – 4PMPicnic, Friday, 4PM Apr 24th

April 16, 2009


Balance SheetXYZ CorpAs of March 31st, 2009

Assets

Liabilities

Net Worth (= Assets - Liabilites)

April 16, 2009


Income StatementXYZ Corporationfor the three month period ending March 31st, 2009

Revenues: xxxxx.xx

Expenses: - yyyyy.yy

________

Net Income zzzzzz.zz

Taxes - qqq.qq

Net Income After Tax nnnnn.nn

April 16, 2009


Difference between Bal Sheet and Inc Statements

  • Balance sheet designed to show net value of the company

    • Always a specific moment in time

  • Income Statement

    • Connects one Bal Sheet to another

    • Always a flow over a specific time: starts on a certain date and ends on a certain date

    • Quarterly…..Annual, most common income statements

April 16, 2009


Corporate Governance

  • We speak here of “public companies.” (Private companies are unlikely to have corporate governance, especially when there is a single owner)

  • Does the Board of Directors act as a single owner of the company would act?

    • If not, then there is a failure of corporate governance

    • Principle – agent problem: shareholders are the principles; management is the agent (board of directors are also agents)

April 16, 2009


Evidence That There May Be Problems with Corporate Governance

  • Executive Compensation

    • Stock Options

    • Managed Earnings

  • Mergers and Acquisitions

April 16, 2009


Mergers & Acquisitions

  • If company A buys company B, is that in the best interest of shareholders of company A (or B?)

  • If company A and B merge, is that in the best interest of shareholders of A and B

  • Different from a leveraged buyout, which is almost always in the interest of a shareholder

April 16, 2009


What is a leveraged buyout (LBO)?

  • Person (or thing) A bids for a public (could be private) company

    • Friendly buyout

    • “Hostile” buyout

  • Sometimes buyer has no cash (or anything)

    • How does he buy it (if no cash)

    • Milken and junk bonds

    • Modern version: private equity fund

April 16, 2009


The End

April 16, 2009


  • Login