Engineering School-Wide Elective Subject. Description given at end of this chapter in SWE section.
Continuation of Finance Theory I, concentrating on corporate financial management. Topics: Capital investment decisions, security issues, dividend policy, optimal capital structure, hedging and risk management, futures markets and real options analysis. The objective of this course is to learn the financial tools needed to make good business decisions. The course presents the basic insights of corporate finance theory, but emphasizes the application of theory to real business decisions. Each session involves class discussion, some centered on lectures and others around business cases.
The evolving organization and operation of real estate capital markets. Sources of real estate capital. Primary and secondary mortgage markets. The investment behavior of real estate assets. The development of REITs and securitized debt markets. Advanced pricing techniques for complex real estate securities. This course presents some of the major concepts, principles, analytical methods and tools useful for making investment and finance decisions regarding commercial real estate assets. As the second in a two-course sequence, this course focuses on more advanced topics and the "macro" level, which pertains to decisions about collections of many individual real estate assets, that is, portfolio or firm level decisions and investment management considerations. (More fundamental "micro" level analysis, pertaining to individual properties and deals, is covered in 11.431 taught in the fall semester). This course also introduces and surveys the major public capital market real estate vehicles, REITs and MBS. Other topics treated include a selection among such subjects as real options, land valuation, development project financial analysis, corporate real estate, capital structure, portfolio strategy, equilibrium pricing of asset classes, investment performance measurement and benchmarking, investment management, and international real estate investing (not all subjects covered every semester).
