The Corporate finance class

“Corporate finance is the most helpful course I’ve taken, and it works especially well in my internship”,  a second-year MBA told me last semester. Indeed, it covers quite a lot financial principles in the practical world, and also includes several cases; one group project and one simulation that help students to have a better command of the fundamental knowledge of corporate finance.

The online homework seems a little bit tough at the beginning, and I got many poor scores at first. This discouraged me a lot, to be honest. However, I do understand the ideas better through completing these assignments.

The group project topic we chose was “IPO analysis—Energy Industry in China”, which aimed to find the best time for a company to have its initial public offering in this specific industry. The research lasted for the entire semester, including finding data, building our financial models, and writing a report. We collected all the valuable data from Bloomberg efficiently. We ended up turning in a 50-page report, and felt we put what we learned to use.

The last thing I want to mention is the simulation, an online role play exercise, which let us understand the M&A process deeper. It requires three people on each team, who stand for the CEOs of two small companies who seek to merge with each other, and one international giant company that seeks to acquire them. Each player needs to calculate the price (based on their equity valuation method) before the negotiation, then bargain the proper merger or acquisition price in class. The negotiation process was very exciting because at this time you’re taking a big role in steering the company strategy and you should always meet the best interests of its shareholders—to acquire with the lowest price or to sell under the highest offer. Any improper price could lead to a failed M&A and see a sharp decline in your stock price immediately.