COURSE BASICS

Course Code FIN6003

Credit Hours 3
Lectures [No. of Lec(s) Per Week] 2 Duration 1.5 hour
Lab Sessions Duration

FIN 6003
[Corporate Finance]

COURSE DISTRIBUTION
Program(s) Attached To MBA
Core / Elective Core
Course Pre-requisites No

COURSE DESCRIPTION
This course stresses the modern fundamentals of corporate financial decision making with special
reference to investment, financing and dividend distribution. The course while building upon introductory
courses in accounting, economics and quantitative analysis the course develops distinctive conceptual
frameworks and specialized tools for solving real world financial problems at both the individual and
corporate level. These issues are the capital budgeting, capital structure, corporate investment, sources of
corporate funding, corporate contingent claims, dividend policy; financial risk management etc. The
course is a blend of theory and practice. While diligent practice will make you competent in financial
techniques, a good grasp of theory will help you think systematically about ways to solve a problem for
which no existing technique is suitable or available.

COURSE OBJECTIVES
This course is designed to provide students with a deeper understanding of how firms finance, invest and manage
themselves in the `real world'. The main objective of the course is to provide the conceptual background for
corporate financial analysis from the point of corporate value creation. The course develops theoretical framework
for understanding and analyzing major financial problems of modern firm in the market environment. The course
covers basic models of corporate capital valuation, including pricing models for primary financial assets, real assets
valuation and investment projects analysis, capital structure, derivative assets and contingent claims on assets. The
course is focused on developing skills in analyzing corporate behavior in capital markets and the relationship of
agent and principal in raising funds, allocating capital, and distributing returns. It provides necessary knowledge in
evaluating different management decisions and their influence on corporate performance and value.
LEARNING OUTCOMES
Upon successful completion of this course, the student
will have reliably demonstrated the ability to:

1. Explain and be able to communicate the nature of corporate finance in an academic or a business forum;
Distinguish different types of business structure, identify the major corporate financial decisions and corporate
objective, and describe some important basic concepts.
2. Evaluate investment decisions using capital budgeting techniques.
3. Calculate and interpret the cost of capital of a corporation.
4. Evaluate alternative sources of financing and the impact on capital structure and risk.
5. Explain how to value a firm and apply skills in evaluation debt and equity securities. Evaluate capital structure
decisions.
6. Critically apply and discuss the theories relating dividends to share price and cost of capital.
7. Better understand how shareholders try to maximize the value of their stake in the firm given such market
imperfections

PROGRAM OBJECTIVES
1. Introduce students to an updated contemporary knowledgebase as well as best practices that are
futuristic in nature. Our students will be prepared to effectively manage and eventually spearhead
growth oriented organizations and businesses
2. Inculcate sharp analytical capabilities and intrepid problem solving skills in our students. The rigor of the
program will be designed in a way to expose students to frequent, in-depth quantitative and qualitative
analyses, thereby brushing up their intrinsic critical reasoning capabilities
3. Train the students to identify and analyze emerging trends in global business environment and draw
prudent correlations with the factors dominant in indigenous industries or markets
4. Offer ample opportunities to the students to express and refine their innovativeness element. UCP MBA
students will be encouraged to conceive out-of-box ideas and express their ingenious to execute even
stereotype solutions in unconventional ways
5. Instill curiosity in the students to boost their learning appetite. The program will obtain its leverage by
synergizing inductive and deductive teaching styles adopted on grounds of nature of course contents,
varying from course to course
6. Encourage a diversity of student base in the program. This will ensure a healthy diversity of perspectives
emanating from students with varying backgrounds: be it cultural, social strata or simply past academic
backgrounds at undergraduate level. This diversity will also be sought after in the faculty mix for the
program
7. Polish interpersonal skills of the students. The program will offer adequate opportunities to students to
refine their oratory skills, verbal and oral presentation skills, capabilities to build effective teams with
result oriented group dynamics and general leadership traits
8. Set high standards for integrity and fairness, encompassing all stakeholders of the program. Program
leadership, faculty and students will collectively promote a scholastic culture where merit and honesty
are foremost values to be taken care of
9. Enunciate civic sense and upright professional ethics through meticulously designed course contents
10. Ensure that MBA projects align with the contemporary needs of local industry and serve as an instrument
to bridge the gap between academia and industry
Map if course objectives or outcomes specifically relate to any program objectives (along with corresponding assessment item):

PROGRAM OBJECTIVES (COURSE) LEARNING OUTCOMES COURSE ASSESSMENT ITEM

1,2,3 1,5
4,5 1,3,2

ASSESSMENT STRUCTURE
Assessment Items Percentage
Quiz(s) & Assignments 10
Class Participation 05
Midterm Examination 30
Final Examination 40
Project/Presentation 15

Any specific teaching/learning strategies:

COURSE CONTENT AND DELIVERY PLAN

Application (Learning Outcomes achieved through this
Lecture Topics
topic)
Introduction to CF, LONG-TERM  Power Point
FINANCIAL PLANNING &  Handouts
GROWTH  Book problems

1,2  Financial planning models

 External financing and growth
 Internal growth and sustainable
growth

PROJECT CASH FLOWS FOR

 Power Point
INVESTMENT DECISIONS
 Class Activity
 Projected Cash Flows  Case Assignment-1
3,4  Investment Cash Flows  Quiz 1
 Pro Forma financial
Statements
 Estimating NPV Estimates

5,6 PROJECT ANALYSIS AND  Power Point

EVALUATION  Handouts
 Book problems
 Scenario and other what-if analysis  Case Assignment-2
 Operating leverage  Quiz-2
 Capital rationing
 Accounting vs.
Financial Break-Even
 RAISING CAPITAL

 Early stage financing & venture

capital, Underwriters
 IPO’s and Under pricing  Reading Material
7  Costs of issuing securities  Presentation/class participation
 Rights, Dilution  Assignment 3
 Issuing Long Term Debt
 Securitization (bundling-
unbundling)
 Mutual funds management
FINANCIAL LEVERAGE AND
8 CAPITAL STRUCTURE POLICY

 Capital structure & Cost of Capital

9 Mid Term
FINANCIAL LEVERAGE AND
CAPITAL STRUCTURE POLICY  Power Point
 Handouts
10  The effect of financial leverage  Book problems
 Optimal capital structure

DIVIDENDS AND DIVIDEND

POLICY

 Cash dividend and dividend  Quiz-3

11 payment
 Class Activities
 Low payout and high payout
factors
 Establishing a dividend policy
 Stock repurchase, Stock splits
SHORT TERM FINANCE AND
PLANNING
 Power Point
 Operating and Cash Cycle  Handouts
 Alternative Financing Policies for  Book problems
12,13 current assets
 Case Study
 Short Term Borrowing
 Cash and Liquidity Management
 Float Management
 Cash Collection and Disbursements
HYBRID FINANCING: LEASING
 Case Study
 What is Lease, Why Lease?  Handouts
 Financial & Operating Lease  Book problems
14,15  Valuing Financial Lease
 Leasing Versus Purchasing
Decision
 MERGERS,  Case Study
ACQUISITIONS & FINANCIAL  Handouts
DISTRESS

 M & A: Concepts & Benefits

 Forms of M & A & Defensive
16 tactics
 NPV of a merger
 Leverage Buyouts(LBO) &
Divestitures
 Intro to Bankruptcy Liquidation &
Re-organization

Final Term

LEARNING RESOURCES
Books: Fundamentals of Corporate Finance by Ross, Westerfield & Jordon (8 th Edition)

REFRENCE 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.
3. Financial Management, Theory and Practices by Brigham & Ehrhard (11 th Edition)