2014 Elizabeth Chopin Visiting Professorship - Joel M. Stern

 

 

Internationally Renowned Financial Expert Joel Stern Taught a Finance Course for Webster University and Lauder Business School Students

Webster Vienna Private University, through the Elizabeth Chopin Visiting Professorship and in partnership with Lauder Business School, had the privilege to host Prof. Joel Stern’s course: “The Theory and Policy of Modern Finance” in spring 2014.

The course emphasized problem solving and applications for the theories of modern finance. What efficiencies of markets means in a practical sense was demonstrated, the economic model of the firm was compared with the accounting model, the weaknesses of the accounting framework were demonstrated in valuation of acquisitions and designing incentive contracts for management. Dividend policy and capital structure were investigated as they relate to changes in share value and the price-to-earnings ratio. The concept of cost of capital was shown to be independent of capital structure even in the real world, a principal component of the Miller-Modigliani theorems in a world of perfect capital markets. Finally, three alternate models were presented for pricing firms, including initial public offerings, acquisitions and divestitures and for internal capital allocation. Strategic planning and valuation was reconciled and the EVA framework was used for designing incentive contracts for management, boards of directors and even for all employees right down to the shop floor. The emphasis was on real world illustrations.