School of Management, (SOM)
 
SM80.1703 : Corporate Finance  3(3-0)
 
Course objectives:

The purpose of this course is to provide students thorough knowledge in financial management and financial decision tools. The course aims to provide understanding in corporate finance for both practical and theoretical aspects and an opportunity to utilize valuation techniques in investment banking transactions.

 
Learning Outcomes:
The students on completion of this course would be able to:
  • Apply time value of money for financial decisions
  • Derive cash flows, interest rates and make appropriate financial decisions.
  • Formulate sound capital budgeting, financial and capital asset investment decisions.
  • Critically assess the value of companies and investment banking transactions.
 
Pre-requisite(s):

None
 
Course Outline:
      I.    Basic Concepts of Finance
1.    Time value of money
2.    Application of time value of money
 
    II.    Introduction to Financial Management
1.    Investment and financing decision
2.    Financial markets

   III.    Capital Budgeting
1.    Investment rules
2.    Cash flows
3.    Growth
4.    Capital budgeting
 
 IV.    Capital Assets Investment
1.    Risks and returns
2.    Valuing stocks and bonds
3.    Capital asset pricing model (CAPM)
4.    Relationship between return and risk
 
   V.    Long-term Financing
1.    Capital structure
2.    Dividend policy

 VI.    Short Term Financial Planning
1.    Working capital management
2.    Financing short term capital

 VII.    Investment Banking Transaction
1.    Initial public offering (IPO)
2.    Seasoned equity offering (SEO)
3.    Merger and acquisition

VIII.    Corporate Governance
1.    Duty of boards of directors
2.    Role of external control mechanism
 
Laboratory Sessions:

None
 
Learning Resources:

Textbook:
 
Ross, S. A., Westerfield, R.W. & Jaffe, J. F. (2012). Corporate finance (10th ed.). New York: McGraw-Hill/Irwin.
 
Reference Books:
Bodie, Z., Kane, A. & Marcus, A.J. (2013). Investments (10th  ed.). New York:  Mc-Graw-Hill.

Koller, T., Goedhart, M.H., Wessels, D. & McKinsey and Company (2015). Valuation: measuring and managing the value of companies (6th  ed.). New Jersey: Wiley.
 
Journals and Magazines:
The Journal of Finance, Wiley
The Journal of Financial Economics, Elsevier
Journal of Financial and Quantitative Analysis, Cambridge University Press

Others:  
Handouts
 
Time Distribution and Study Load:
Lectures hours = 45 hours
Assignments   =  45 hours
Self study         =  90 hours
 
Teaching and Learning Methods:
This course emphasizes financial calculation and understanding in making sound financial decisions. Instructor encourages participation and hands-on solving practice questions in classroom. Teaching methods are lecturing, breakout sessions, of approximately 30 minutes for each lecture, to solve practice questions, and discussion in class. Instructor assigns individual homework, as it is an important part for student learning. Final group assignment serves as a comprehensive test of all concepts, calculations and understanding of this course.
 
Evaluation Scheme:
Mid-Semester exam                               30%
Final exam                                              40%
Homework                                               15%
Group assignment                                  15%
 
An “A” would be awarded if a student can elaborate the knowledge learned in class by presenting his/her own analysis on given topics. A “B” would be awarded if a student shows an overall understanding of all given topics; a “C” would be given if a student performs below average expectation on both knowledge acquired and analysis. A “D” would be given if a student does not meet basic expectations in understanding and analyzing the topics and issues presented in the course.
 
Instructor(s):
SECTION NAME
A Dr. Tobias Endress
B Dr. Syed Shurid Khan