So what do you learn in the MSF Program? Join us for a classroom visit and see for yourself. Classes are offered Tuesday – Thursday at 4:30-7:10pm and 7:15-9:55pm. Stay for part or all of the evening. Contact the MSF Program Office to make arrangements.

Not able to join us? We can’t cover everything, but here are a few sample questions from the General Theory in Corporate Finance  mid-term exam  that should give you a taste of what we have to offer:

General Theory in Corporate Finance

1) 5 years ago your firm issued 20-year bonds. The bonds have a face value of $10,000,000, a coupon rate of 9.5%, and pay coupons semi-annually. Your firm just made the tenth coupon payment. The market rate of interest for bonds like your firm’s is now 8.25% (annual interest, compounded semi-annually). Your firm has the right to call the bonds for a premium of 10% (i.e. your firm can buy back all of the bonds for $11,000,000). If you want to call the bonds, you have to decide now.

Your firm would have no trouble issuing new bonds at the new market rate of 8.25% (the new bonds would have a maturity of 15 years, coupon rate of 8.25% and sell at par). Your investment banker has suggested that your firm could save money by calling in the debt and issuing $12 million of new debt at the new, lower rate.

a) Is your investment banker correct? Should you buy back the old bond issue for $11 million? Why or why not?

Answer (PDF)