Gary J. Gray

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Teaching Professor in Finance

Department Finance
Office Address 330 Business Building
Phone Number 814-863-3564
Email Address

Before joining the Smeal College, Dr. Gray was an investmentbanker/financial engineer specializing in municipal derivative productsand new financing techniques and programs. He was the principalarchitect of a number of financial products including: tax-exemptzero-coupon bonds, capital appreciation bonds, agricultural revenuebonds, tender option crossover refunding bonds, RIBS/SAVRS, BondPayment Obligations (BPOs), Premium Municipal Bond Receipts, GovernmentDevelopment Receipts, municipal call options (MuniCHOPs), secondarymarket versions of RIBS/SAVRS and tax-exempt bond and preferred stockprograms using various custody and trust arrangements. He assisted inthe sale of derivative products to large institutional investors andpresented Lehman's programs at municipal and derivatives conferences.


Stock and Bond Valuation. Investment Banking. Financial Institutions. Municipal Finance.


Ph D, Finance, The Pennsylvania State University, 1984

MBA, The Pennsylvania State University, 1977

BS, Electrical Engineering, The Pennsylvania State University, 1972

Courses Taught

Nature of finance function; risk and return concepts; working capital; dividend policies; mergers; security markets; acquisition and management of corporate capital; analysis of operations, forecasting capital requirements; raising capital; and planning profits. Available to Baccalaureate students only. Not available to students who have taken B A 301. FIN 301 Corporation Finance (3) Finance 301, Corporation Finance, is a 3 credit course. FIN 301 is offered, at minimum, once a year during either the fall or spring semester. FIN 301 may not be used to satisfy Smeal College baccalaureate degree requirements. A student may not receive credit toward graduation for both FIN 100 and 301, or for both B A 301 and FIN 301. FIN 301 provides a basic understanding and framework of how firms acquire, allocate, and control their financial resources. It covers the acquisition and management of corporate capital; analysis of operations, forecasting capital requirements, raising capital, and planning profits. This is an introductory finance course focusing on basic financial principles and practices essential to managing a business. In addition, this course also covers financial markets, institutions, organizational forms and investments. FIN 301 relies heavily on accounting and economic principles with a strong emphasis on problem solving and decision making. One objective of this class is to be able to assess the past and present performance of the firm. This can be achieved through vertical and horizontal analysis of the financial statements as well as ratio analysis. Another aspect of this course is the financial planning process. This includes concepts such as pro forma statements, developing the statement of cash flows, as well as the budgeting process through the preparation of the cash budget. Another facet of this class is to understand how financing and investment decisions are made. Students will learn about the time value of money as well as fundamental techniques for valuing financial assets such as stocks and bonds. Additionally, capital budgeting techniques such as the net present value and internal rate of return are explained. Other important objectives include the management of working capital, the determination of the cost of capital, operating and financial leverage, and risk and return. The concepts and tools covered in this class allow the student to gain a fundamental understanding of how the finance function works within the business environment. Finance 301 promotes critical thinking and will enable the student to better integrate the individual functions of a business in order to make good business decisions.

FIN 408 – Financial Markets and Institutions (3)
Functional analysis of major credit institutions; sources and uses of funds; impact of government regulation.

FIN 496 – Independent Studies (variable)
Creative projects, including research and design, which are supervised on an individual basis and which fall outside the scope of formal courses.

B A 301 – Finance (2)
This course provides an overview of finance. The primary focus is on financial decision making in organizations - also known as corporate finance. In addition to corporate finance, the course also covers the two other primary areas of finance: financial m

Selected Publications

Woolridge J. R., Gray G. J., "Basic Principles of Finance: An Introductory Text." (Kendall Hunt), 2011, pp. 501
Woolridge J. R., Gray G. J., "Applied Principles of Finance." (Kendall Hunt), 2006, pp. 486
Woolridge J. R., Gray G. J., "The New Corporate Finance, Capital Markets, and Valuation: An Introductory Text." (Kendall Hunt), 2003, pp. 505
Gray G. J., Woolridge J. R., Cusatis P. J., "Streetsmart Guide to Valuing a Stock." (McGraw-Hill), 1999, pp. 234
Gray G. J., Cusatis P. J., "Municipal Derivative Securities: Uses and Valuation." (Dow Jones Irwin), 1995, pp. 285
Engebretson K., Gray G. J., "An Introduction to Municipal Derivative Products." Government Finance Review, vol. 9, no. 1, 1993, pp. 21-25
Engebretson K., Gray G. J., "An Introduction to Municipal Derivative Products: Part II." Government Finance Review, vol. 9, no. 2, 1993, pp. 17-20
Gray G. J., Cusatis P., "Understanding and Valuing Municipal Derivative Securities." Municipal Finance Journal, vol. 14, no. 2, 1993, pp. 1-41
Gray G. J., Engebretson K., "Residual Interest Bonds (RIBS)." Municipal Finance Journal, vol. 13, no. 1, 1992, pp. 1-29
Gray G. J., "SEC Rule 415: Benefits and Costs for Equity Issuers." Securities Industry Trends-Securities Industry Association, vol. X, no. 5, 1984, pp. 1-15
Woolridge J. R., Gray G. J., "Are Original Issue Discount Bonds Here to Stay?." Harvard Business Review, 1982, pp. 54-56
Gray G. J., Woolridge J. R., Ferrara S., "Competition in Agricultural Lending: Some Recent Developments." Journal of Commercial Bank Lending, vol. 64, no. 12, 1982, pp. 2-17
Gray G. J., Woolridge J. R., "IDBs - Opportunities and Challenges for Commercial Banks." Municipal Finance Journal, vol. 2, no. 4, 1981, pp. 277-284
Gouldey B. K., Gray G. J., "Implementing Mean Variance Theory in the Selection of U.S. Government Bond Portfolios." Journal of Bank Research, vol. 2, no. 4, 1981, pp. 161-173
Gray G. J., Woolridge J. R., "Industrial Development Bonds - Opportunities and Challenges." The Bankers Magazine, vol. 164, no. 4, 1981, pp. 82-87
Woolridge J. R., Gray G. J., "The CBO Study on Small Issue IRBs: Fact or Fiction?." Municipal Finance Journal, vol. 2, no. 2, 1981, pp. 83-89