Make no mistake, Corporate Finance is a difficult module for a non-quant. Of course this is why City types get paid so well – finance is that killer combination of both difficult and boring. It’s serious ‘hard work’.
And it remains hard work even when you’re getting it right. I got most of last week’s set correct, making me feel like a Master of the Universe in class today – but getting to grips with the concepts strongly enough to answer the questions took SEVEN HOURS on Wednesday, and that’s in addition to the textbook readings, re-readings, and revision plus of course the lectures themselves. I estimate Corporate Finance takes about three times as much time per week as any other module.
Or four times if you concentrate on this week. The next problem set is TWELVE questions long, some with up to eight parts involving multiple subcalculations. Now assuming the NPV of the course is on the SML as applied to MBA modules, the yield of the module over the 10-week time-to-maturity is only slightly more than 33% of the expected return if calculated in accordance with second-order Taylor and discounted at a constant rate…!