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Corporate Finance
Professor McCall
Basic Information
• Syllabus is online via my Faculty Profile
• Read Syllabus and Attendance Policy
• Required Book: William J. Carney, Corporate Finance Principles and Practice (Foundation Press)
• A word on business and accounting background
What is involved in the Study of Corporate Finance
• Measurement, Calculation and Evaluation of Firms and their Output
• The investment in and return from business ventures
What do Corporate Finance Lawyers Do?
• Represent Banks and Businesses in structuring and documenting secured and unsecured loans (Banking Law, Corporate Law, Contract Law, Uniform Commercial Code, Bankruptcy Law, State Debtor-Creditor Law, Tax Law)
• Represent Investment Banks and Companies in accessing Public Finance Markets (Securities Laws, Contract Law, Corporate Law, Bankruptcy Law, Uniform Commercial Code, Tax Law)
What do Corporate Finance Lawyers Do?
• Represent Private Investors (Venture Capitalists, Business Angels, Private Equity Funds) and Companies in private investments in business ventures (Contract Law, Corporate Law, Securities Laws, Bankruptcy Law, Tax Law)
• Represent Originators, underwriters and Services in Securitization (Securities Laws, Fraudulent Conveyance Laws, Corporate Law, Contract Law, Uniform Commercial Code, Bankruptcy Law, State Debtor-Creditor Law, Tax Law)
Outline of Course
• Accounting: Understanding and Using Financial Statements: Abbreviated Accounting for Lawyers
• Understanding different metrics for valuing assets, liabilities, firms and investments
• Overview of Capital Structure• Issues Connected with Common Stock• Corporate Debt with a focus on Corporate bonds• Issues connected to Preferred Stock• Options and Convertibles• Dividends and Distributions
Accounting for Lawyers
• Why does it matter?• I went to law school because I do not want to be an accountant • Accounting – process of producing financial statements• Auditing – Review of the methodology and processes for
producing accounting statements• Public Company – A company with an obligation to file reports
under the Securities Exchange Act of 1934 usually as a result of conducting a public offering of securities
• Private Company – A company which does nto have such an obligation
Bodies of Accounting “Law”
• US GAAP (Generally Accepted Accounting Principles in the United States)
• Other country GAAP (UK GAAP, Mexican GAAP)• International Accounting Standards (IAS) also referred to as
IFRS – transnational harmonization of accounting standards mandatory for European Public Companies and permitted in some US Public Company filings.
Sources of Accounting “Law”
• Financial Accounting Standards Board FASB– SFAS (Statements of Financial Accounting Standards)– (EITF) Early Issue Task Force Reports
• US Securities and Exchange Commission– Regulation S-X– (SAB) Staff Accounting Bulletins– Office of the Chief Accountant and resolving Accounting Comments on
Registration Statements
• Public Company Accounting Oversight Board (PCAOB)• International Accounting Standards Board (IASB)
Handy Web Addresses 10
• Law.com’s daily corporate law news site:– http://www.law.com/jsp/pc/corplaw
• The SEC’s EDGAR site for all corporate filings:– http://www.sec.gov/edgar/searchedgar/webusers.htm
• The Corporate Library:– http://www.thecorporatelibrary.com
• Financial Dictionary (your glossary for this course):– http://www.afponline.org/dictionary/bfglosa
• Public Company Accounting Oversight Board– http://www.pcaobus.org/
Handy Web Addresses 11
• Financial Accounting Standards Board– http://www.fasb.org/
• Staff Accounting Bulletins– http://www.sec.gov/interps/account.shtml
• International Accounting Standards Board– http://www.iasb.org/Home.htm