Corporate Finance Instructor:Yiwen Fei E-mail:ywfei@sjtu.edu.cn Office: Rm.708,Antai Building Tel 52301256
Corporate Finance Corporate Finance Instructor: Yiwen Fei E-mail: ywfei@sjtu.edu.cn Office: Rm.708, Antai Building Tel : 52301256
Introduction
Introduction Introduction
The Revolution in Corporate Finance Beginning with the work of Merton Miller and Francisco Modigliani in the late 1950s A basic change in the theory of valuation "Accounting model"to "Economic model" 22-2
22-2 The Revolution in Corporate Finance The Revolution in Corporate Finance Beginning with the work of Merton Miller and Francisco Modigliani in the late 1950s A basic change in the theory of valuation “Accounting model ” to “Economic model
The Revolution in Corporate Finance Business School Approach and Economics Department Approach Micro normative and Macro normative "It is not the business of the economist to tell the brewer how to make beer. ■ Some important disagreement: CAPM-Arbitrage price theory DCF-Option price theory 22-3
22-3 The Revolution in Corporate Finance The Revolution in Corporate Finance Business School Approach and Economics Department Approach Micro normative and Macro normative “It is not the business of the economist to tell the brewer how to make beer.” Some important disagreement: CAPM – Arbitrage price theory DCF – Option price theory
Some highpoints of the history Harry Markowits and portfolio selection "Portfolio Selection",Journal of Finance, 1952 --"risk"and "return":Mean-Variance model William Sharp and CAPM "Capital Asset Prices:A Theory of Market Equilibrium under Conditions of Risk, Journal of Finance,in 1964 22-4
22-4 Some highpoints of the history Some highpoints of the history Harry Markowits and portfolio selection “Portfolio Selection”, Journal of Finance, 1952 -- “risk” and “return”: Mean-Variance model William Sharp and CAPM “Capital Asset Prices：A Theory of Market Equilibrium under Conditions of Risk” , Journal of Finance, in 1964