FINC 302

Business Finance II

Lecturer: Dr. Vera O. L. Fiador, UGBS

Contact Information: vfiador@ug.edu.gh

College of Education
School of Continuing and Distance Education
2014/2015 – 2016/2017
SESSION 9

RAISING CAPITAL- ISSUING EQUITY

Slide 2
 Description
• This course builds on the Introduction to Business Finance
course by examining the nature and workings of financial
markets and their use by corporations and investors. Building
on the premise that the goal of management is to increase
the value of the firm, we will examine in detail the key
corporate decisions that contribute to shareholder value,
namely investment, financing and payout decisions. From the
point of view of corporations, the investment decision we
would discuss will include capital budgeting and M&A
decisions. The techniques used in selecting capital projects
would be examined. The financing aspect comprises decisions
about capital structure - how much debt relative to equity is
optimal for a particular firm.

Slide 3
• We will also consider how companies can return
value to shareholders via dividend payment and
other "payback" strategies. Topics to be covered
include: the trade-off between risk and return; cost
of capital determination; capital budgeting analysis;
long term financing decisions involving capital
raisings and initial public offerings, capital structure
decisions, dividend policy and mergers and
acquisitions.

Slide 4
 Course Objectives
• You will learn how to use financial management techniques to
make corporate finance and personal finance decisions.
• Specifically, on successful completion of this subject, students
would be able to:
– Explain the trade-off between risk and return,
– Evaluate the different techniques used on capital budgeting
decisions
– Analyze long-term financing decisions, including dividend policy,
– Identify the determinants of dividend policy
– Discuss the theory and practice of cost of capital and capital
structure decisions.
– Explain the basics of mergers and acquisition
Slide 5
 Reading Lists

• Van Horne, J. C. and Wachowicz, J. M. (VH&W), Fundamentals of

Financial Management, Twelfth Edition or better, Prentice Hall, FT.

• Abor, J. Y. Financial Markets & Institutions: A Frontier Market Perspective,

First Edition, DigiBooks.

• Mensah, S. Securities Markets and Investments A Ghanaian Primer Fifth

Edition, Smartline Ltd.
•

Slide 6
 Reading List
• Keown Arthur J., Martin John D., Petty William J.,
Scott David F. Jr. (2001), Financial Management,
International Edition; Pearson Prentice Hall.

• Brealey, Myres and Marcus (BMM), Fundamentals of

Corporate Finance, Third Edition or better, McGraw
Hill or any other edition of the text book.
•
• Ross, S. A; Westerfield R.W., Jordan B, D.,
Foundations of Corporate Finance, McGraw Hill,
2006 or better
Slide 7