Households allocate nearly one-quarter of their assets to owner-occupied housing and spend more on housing services than on any other expenditure category. Over the last decade, housing transactions have been the focus of many innovative firms that use technology to transform old ways of doing business. This course examines the housing market from occupants’, investors’, entrepreneurs’ and policymakers’ perspectives. The course is divided into five modules. The first module explores the economics of owning vs. renting, asset valuation and supply-demand dynamics. The second module focuses on the housing search process, with a particular emphasis on fintech innovations that disintermediate real estate brokerage. The third module delves into home financing decisions. The fourth module studies investments in rental housing, including vacation and other short-term rentals facilitated by person-to-person rental platforms. The final module takes up economic and social policy questions pertinent to housing, such as housing affordability and discrimination, the role of housing in monetary policy, and the optimal policy response to housing market crashes.
This course provides an overview of the real estate industry and the basic analytic techniques used for investing in this $17 trillion asset class. Students will take a hands-on approach, building a practical knowledge of real estate through case studies and class discussions. The study of multi-faceted real estate projects allows students to: 1) enhance their understanding of valuation, financing and portfolio management; and 2) analyze a broad set of management problems, such as how to recognize and describe value creation opportunities, how to evaluate and manage risk, how to structure partnerships and business contracts, and how to use real estate optimally within an operating business. A highlight of the course is the opportunity to interact with industry leaders and learn about the latest trends in the industry.
Finance II: Corporate Finance (Kellogg 2008-2017)
Corporate Finance covers the financial knowledge you need to run a firm, whether the firm is a multi-billion international conglomerate or a three-person start up. Building on your knowledge of capital budgeting and valuation from Finance I, you will learn how to answer the two fundamental questions of corporate finance. First, which source of capital—debt, equity, or a hybrid—should you use to fund the firm and maximize its value? Second, how should you distribute the firm’s profits to maximize value for the firm’s owners? We introduce a framework for analyzing these problems and develop practical knowledge through case studies and examples from current events.
This course is important for someone who plans to run a firm or division, invest in a firm (e.g., private and public equity investing), or assist with a firm’s investment and funding decisions (e.g., investment banking and consulting). The course also provides invaluable financial knowledge and literacy for students focused on management, marketing, and operations.