The Higher Canadian Institute for Business
and Engineering Technology
Quality Assurance Unit
Course Specification
Course Title: Business Finance II
Course Code:BADM 214
I. Basic Course Information
Program(s) on which the course is given: Business Administration
Core or elective element of program:Core
Department offering the course: Business
Academic level:Second Level
Semester in which course is offered: Spring
Course pre-requisite(s): BADM 210
Credit Hours:3
Contact Hours Through:
Lecture
3.0
Tutorial*
2.0
Practical*
0.0
Total
5.0
Approval date of course specification:January 2014
II. Overall Aims of Course
This course provides a background for the differences between the securities types as
stocks and bonds and their evaluation methods.
It develops the various capital
budgeting techniques used in making their investment decisions.
III. Program ILOs covered by course
Program Intended Learning Outcomes (By Code)
Knowledge &
Intellectual Skills
Professional Skills
Understanding
K4,K6, K9, K11,
K17
I4,I5, I6
P1,P3,P17,P15
General
Skills
G5,G7
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The Higher Canadian Institute for Business
and Engineering Technology
Quality Assurance Unit
Course Specification
IV. Intended Learning Outcomes of Course (ILOs)
a. Knowledge and Understanding
Upon completion of the course, students should be able to:
K1.Discuss the issues associated with long-term debt securities.
K2.Recognize the impact of inflation on interest rates.
K3. Understand how the stock markets work.
K4. Relate stock pricing to the future dividends and its growth
K5.Recognize the proposed investment evaluation techniques.
K6. Identify the different trends in making capital investment decisions.
K7. Classify the bonds and stock types and their important features.
K8. Define the bond ratings and yields.
K9. Relate the sources and uses of capital through describing the capital budgeting
process.
K10. Identify the strengths and weaknesses of different investment evaluation
techniques.
K11. State the alternative definitions of the project operating cash flow and the
incremental cash flows.
K12. Identify the project cash flows in an economic sense.
K13. Recognize the concept of cost of capital and some preliminaries.
K14. Classify the cost of capital into equity and debt.
b. Intellectual/Cognitive Skills
Upon completion of the course, students should be able to:
I1. Compute the bond prices and yields.
I2. Compute the stock prices, its dividends and growth rates.
I3. Calculate the payback period, the net present value , the internal rate of return, and
the profitability index of the proposed investments projects.
I4. Calculate the relevant cash flows for a proposed project.
I5. Prepare projected financial statements.
I6.Calculate the cost of equity and cost of debt
I7. Calculate the weighted average cost of capital.
c. Practical/Professional Skills
Upon completion of the course, students should be able to:
P1. Evaluate the different types of bonds.
P2. Combine the stock prices and its dividends growth rates.
P3. Justify the capital budgeting decisions.
P4. Estimate the value of new business.
P5. Evaluate the equivalent annual cost of a project.
P6. Analyze the discounted cash flows of proposed projects.
P7. Compute the minimum required of return on an investment.
d. General and Transferable Skills
Upon completion of the course, students should be able to:
G1.Use different evaluation techniques for new proposed investments.
G2. Deal with different capital budgeting problems.
G3. Manage the capital sources and uses.
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The Higher Canadian Institute for Business
and Engineering Technology
Quality Assurance Unit
Course Specification
V. Course MatrixContents
Main Topics / Chapters
123-
456-
Duration
(Weeks)
Chapter 7:Interest Rates
and Bond Valuation
Chapter 8: Stock Valuation
Chapter 9: Net Present
Value and other
investment criteria
Chapter 10: Making
Capital Investment
Decisions
Chapter 14:Cost of capital
Revision
Net Teaching Weeks
2
3
Course ILOs Covered by Topic
(By ILO Code)
K&U
I.S.
P.S.
G.S.
K1, K2, K6,
I1
P1
G1,G2
K7
K3,K4, K6
I2
P2
G2,G3
2
K5,K10
I3
P3,P4,
P15
G1,G3
3
K6,K11,K12
I4,I5
P5,P6,P15
G2,G3
3
1
14
K13,K14
I6, I7
P7
G3
VI. Course Weekly Detailed Topics / hours / ILOs
Week
No.
1
2
3
4
5
6
7
8
Sub-Topics
Total
Hours
Bonds and bond valuation
More about bond features
5
Some different types of bonds
Some features of common and preferred
stocks
Preferred Stock Valuation with constant
growth rates
5
Common Stock valuation with zero
growth, single and multiple holding
growth periods
Common Stock valuation with non5
constant growth, and supernormal growth
Common Stock valuation with two-stage
growth.
5
Components of the required return.
Payback period, Discounted payback
period, Net Present value as investment
5
evaluation technique.
The Internal Rate of return, and the
5
Profitability index.
Midterm Exam
Project Cash flows
5
Incremental Cash Flows
Contact Hours
Theoretical
Practical
Hours
Hours*
3
2
3
2
3
2
3
2
3
2
3
2
3
2
3
The Higher Canadian Institute for Business
and Engineering Technology
Quality Assurance Unit
Course Specification
9
10
11
12
13
14
15
Pro Forma Financial Statements
Operating cash flow, net working capital
and capital spending, alternative
5
definitions of operating cash flow
Buy or not to buy decisions.
Setting the bid price.
5
Calculating Equivalent annual costs.
Preliminaries of the cost of capital and
the financial policy
5
Cost of common equity using dividends
growth approach and SML approach
Cost of debt and cost of preferred stock
5
The weighted average cost of Capital
Divisional and Project cost of capital
5
Flotation costs and the WACC
Revision
5
Final Exam
Total Teaching Hours
65
3
2
3
2
3
2
3
2
3
2
3
2
Teaching/Lear
ning Method
Selected
Method
VII. Teaching and Learning Methods
Lectures
√
Tutorials
√
Course ILOs Covered by Method (By ILO Code)
K&U
Intellectual
Skills
Professional
Skills
K1,
K2,K3,K4,K5,K6,K7,K
I1,I2,I3,I4,I5,I P1,P2,P3,P4,P5,P
8,
6,I7
6,P7
K9,K10,K11,K12,K13,
K14
P1,P2,P3,P4,P5,P
6,P7
Genera
l Skills
G1,G2,
G3
G1,G2,
G3
Computer lab
Sessions
Practical lab
Work
Reading
Materials
Web-site
Searches
Research &
Reporting
Problem
Solving /
Problem-based
Learning
Projects
Independent
4
The Higher Canadian Institute for Business
and Engineering Technology
Quality Assurance Unit
Course Specification
Work
Group Work
Case Studies
Presentations
Simulation
Analysis
Others
(Specify):
Selected
Method
VIII. Assessment Methods, Schedule and Grade Distribution
Course ILOs Covered by Method
(By ILO Code)
Assessment
Method
K&U
I.S.
P.S.
Midterm
Exam
Final Exam
Quizzes
Course
Work
Report
Writing
Case Study
Analysis
Oral
Presentations
Practical
Group
Project
Individual
Project
Others
(Specify):
K1,
K2,K3,K4,K5,K6,K
√
7,K8,
K9,K10
K1,
K2,K3,K4,K5,K6,K
√
7,K8,
K9,K10,K11,K12,K
13,K14
K1,
K2,K3,K4,K5,K6,K
√
7,K8,
K9,K10,K11,K12,K
13,K14
G.S.
Assessmen
t
Weight /
Percentage
Week
No.
I1,I2,I3
P1,P2,P3,P
4
G1,G2,G3
25%
7
I1,I2,I3,I4,I5,I
6,I7
P1,P2,P3,P
4,P5,P6,P7
G1,G2,G3
50%
15
I1,I2,I3,I4,I5,I
6,I7
P1,P2,P3,P
4,P5,P6,P7
G1,G2,G3
5%
2,5,8,11
P1,P2,P3,P
4,P5,P6,P7
G1,G2,G3
20%
1-14
5
The Higher Canadian Institute for Business
and Engineering Technology
Quality Assurance Unit
Course Specification
IX.
X. List of References
Required Text Books
Course notes
Stephen A. Ross, R. W. Fundamentals of Corporate Finance.
McGraw-Hill Publishing Company Limited, 2008.


Lecture notes
Recommended books
Financial Management: Principles and Applications. 10thedition.
Arthur J. Keown. John D. Martin, J. William Petty, and David F.
Scott, JRInternational Edition.
Periodicals, Web sites, 
etc …
None
XI. Facilities required for teaching and learning
List the facilities required
 Teaching aids.
 White boards.
 Computer aided data show
Course coordinator: Dr. Engy El Hawary
Head of Department: Dr. Dina Krema
Date: January 2014
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