University of Management and Technology
Course Outline
Course code: FN-590
Course title: Corporate Finance
Program
MBA
Credit Hours
3
Duration
3 hours, 15 sessions
Prerequisites
All core courses of accounting and finance.
Resource Person
Counseling Timing
(Room#
)
Contact
Chairman/Director Programme signature………………………………….
Dean’s signature……………………………
Course Outline
Date………………………………………….
Page 1
Learning Objective:
This course is designed to help you develop a deeper understanding of the issues and
the basic tools needed for corporate manager. We will use spreadsheet modelling
extensively to facilitate our analysis in each topic for the purpose of being efficient.
After studying this course the participants should be able:
1. To evaluate and formulate effective working capital polices to be cash efficient in
day to day operations.
2. To make effective use of financial resources available to an organization.
3. To evaluate various alternatives available to acquire fixed assets.
4. To make use of computer applications in financial management issues.
5. To develop and analyse the pro-forma financial statements and also the sensitivity
and scenario analysis for decision making.
6. To increase your confidence to participate in financial decision making.
Learning Methodology:
The course shall be covered as stipulated in the outline.
Regularity and Punctuality:
Regularity and punctuality will be very strictly observed. You have an allowance of
only six absents (Out of 30 sessions). This includes the leaves that you get approved
from your Batch Advisor. Regarding punctuality, you will be marked present only if
you arrive in the class within five minutes of the scheduled time. Any absents during
the presentation sessions will result in deduction of "1" point each from the class
participation marks. This means that the class participation marks can go into the
negative as well. If your group is making a presentation and you are not there, you get a
zero. If you miss a Quiz/Assignment/Case Study, you will get zero for that session.
Book Readings:
You are supposed to have read the text chapters under discussion in advance.
Questions answered, relating to these text chapters, will contribute to the class
participation marks.
Class Participation:
Positive, healthy and constructive class participation will be monitored for each class.
Particular emphasis will be given during the presentation sessions. The manner in
Course Outline
Page 2
which the question is asked or answered will also be noted. Your behaviour, as business
executives in the class will contribute to the class participation marks.
Financial Modeling with Excel:
We will apply Excel extensively throughout the course and will use spreadsheet
modelling in financial analysis. We will learn how to create our own financial
spreadsheet models in all the corporate finance topics. The students are required to
have good command over spreadsheet usage for this course.
Financial Calculator:
You must have a financial calculator to get through the course. Many of the problems
involve complex mathematical, statistical and financial calculations. A financial
calculator is necessary to solve them.
Advisory Service:
During this programme consider me as your advisor. You are free to discuss the
progress of your courses during the scheduled timings. However to avoid
inconvenience setting up of appointment is also recommended if you would like to
have time other than the time displayed for advising.
Grade Evaluation Criteria
Following is the criteria for the distribution of marks to evaluate final grade in
a semester.
Marks Evaluation
Marks in percentage
Quizzes
15%
Assignments
10%
Mid Term
25%
Attendance & Class Participation
5%
Term Project
10%
Presentations
-
Final exam
35%
Total
100%
Course Outline
Page 3
Recommended Text Books:
Course Pack
Fundamentals of Corporate Finance by Ross, Westerfield & Jordon (8th Edition)
Reference Books:
1.
Financial Management and Policy by James C. Van Horne
2.
Principles of Corporate Finance by Brealey, Myers & Allen, Latest Edition.
3.
Financial Management, Theory and Practices by Brigham & Ehrhard (11th
Edition)
Calendar of Course contents to be covered during semester
Course code: FN-590
Week
Course title: Corporate Finance
Course Contents
Reference Chapter(s)
LONG-TERM FINANCIAL PLANNING & GROWTH
1
 Financial planning models
 External financing and growth
 Internal growth and sustainable growth
PROJECT CASH FLOWS FOR INVESTMENT
DECISIONS
2,3
4,5,6
 Projected Cash Flows
 Investment Cash Flows
 Pro Forma Financial Statements
 Estimating NPV Estimates
PROJECT ANALYSIS AND EVALUATION




Course Outline
Scenario and other what-if analysis
Operating leverage
Capital rationing
Accounting
Page 4
RAISING CAPITAL
 Early stage financing & venture capital, Underwriters
 IPO’s and Under pricing
 Costs of issuing securities
 Rights, Dilution
 Issuing Long Term Debt
 Securitization (bundling-unbundling)
 Mutual funds management
7
8
MIDTERM
FINANCIAL LEVERAGE AND CAPITAL STRUCTURE
POLICY
9,10
11
12,13
14,15
 Capital structure & Cost of Capital
 The effect of financial leverage
 Optimal capital structure
DIVIDENDS AND DIVIDEND POLICY
 Cash dividend and dividend payment
 Low payout and high payout factors
 Establishing a dividend policy
 Stock repurchase, Stock splits
SHORT TERM FINANCE AND PLANNING
 Operating and Cash Cycle
 Alternative Financing Policies for current assets
 Short Term Borrowing
 Cash and Liquidity Management
 Float Management
 Cash Collection and Disbursements
 Target Cash Balance
 Credit and Inventory
 Credit and Receivables
 Factorization
HYBRID FINANCING: LEASING




Course Outline
What is Lease, Why Lease?
Financial & Operating Lease
Valuing Financial Lease
Leasing Versus Purchasing Decision
Page 5