Any leader needs to be able to make informed inquiries about the big issues in finance.
I teach Corporate Finance, which is an elective course about firms’ investment and financing decisions. How do firms decide what projects are valuable? And once they pick their projects, how do they finance them—how much debt, how much equity? My class starts out thinking about valuation, and then we move on to financing and then corporate restructuring.
A wide range of students take my class. Any leader needs to be able to make informed inquiries about the big issues in finance. There is a good deal of group work in my class, and finance types work alongside people who have come from marketing or consulting or nonprofits. Sometimes we have law students or other graduate students, who bring their own perspectives.
The course is case-based. I developed a Yale “raw” case on Kmart with Henry Miller, a restructuring expert who represented the company in bankruptcy. We had a lot of access to primary source documents, which we put online for the students to analyze. The students are asked to sit in January of 2002, when things started to get really messy for the company, evaluate what went wrong, and determine what the firm needs to do going forward. That case comes at the end of the semester, and the goal is to get students to put together all of the tools they learned over the course of the semester. To look at a bankruptcy, you need to know valuation. You also need to know a bit about strategy, since K-Mart was in a tough competitive position and the students need to think about its strategic options. It’s great to see them really master all of those tools and produce rich analyses.
Interviewed on June 25, 2012.