COURSE TITLE: ADVANCE CORPORATE FINANCE
Description:
This course focuses on the advance corporate finance of both publicly held
and private corporations. Students are presented with a conceptual
framework for understanding and addressing problems commonly faced
by corporate decision makers and are provided opportunities to apply
these concepts to contemporary business situations. Topics covered
include, but are not limited to: the relationship between risk and return
including the capital asset pricing model, the valuation and role of debt
and equity, capital budgeting/project evaluation techniques, cost of
capital, cash flow estimation, project risk analysis, real options, company
valuation, and capital structure decisions.
Introduction to Corporate Finance
- Goals of Financial Management
- Conflicts between Company Stakeholders
- Financial Markets
- Introduction
- Concept of Finance
- Role of corporate managers in the firms
- Functions of financial managers in modern time
- Financial environment,
Risk, Cost of Capital, and Capital Budgeting
- Cost of Debt
- Cost of Equity
Weighted Average Cost of Capital
Investment Rules
- Capital budgeting decision rules
- NPV versus IRR, PBP, IP
-Capital Investment Decisions
Cash Flow Estimation
- Identifying Relevant Cash Flows
-Evaluating Capital Budgeting Projects
vvCash flow statement
Source and uses statement
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
Risk and Return
- Expected Rate of Return
- Standard Deviation of Returns
Relationship between Risk and Return
The Capital Asset Pricing Model
- Measuring Portfolio Risk
- Diversification
The Capital Asset Pricing Model (CAPM)
DIVIDENDS AND DIVIDEND POLICY
Cash dividend and dividend payment Low payout and high payout factors Establishing a
dividend policy Stock repurchase, Stock splits
Working Capital management
Introduction
Gross WCM, net WC,
Maturity approach
Short term vs long term financing
Liquidity vs profitability
Liquidity vs profitability and ROI
WCM strategy
FINANCIAL LEVERAGE AND CAPITAL STRUCTURE POLICY
Capital structure & Cost of Capital The effect of financial leverage Optimal capital structure
RECOMMENDED TEXTBOOKS
1. Fundamentals of Corporate Finance by Ross, Westerfield & Jordon (8th Edition)
2. Financial Management, Theory and Practices by Brigham & Ehrhard (11th Edition)
REFERENCE BOOKS AND OTHER READING MATERIALS.
1. Financial Management and Policy by James C. Van Horne 2. Principles of Corporate
Finance by Brealey, Myers & Allen, Latest Edition.