FIN 42A - Corporate Finance 1

2020 - 2021

BANKING ACADEMY OF VIETNAM

FINANCE FACULTY

MODULE HANDBOOK
2020/2021

CORPORATE FINANCE

FIN42A

For ATC programme

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1. MODULE: CORPORATE FINANCE for ATC programme

2. MODULE CODE: FIN42A
3. POTENTIAL STUDENTS
All formal undergraduates of ATC program are able to study this module.
4. PREREQUISITES
Principles of Accounting, Finance and Monetary
5. LENGTH OF MODULE
3 credits. In which: 70% lectures and 30% exercises-seminars-midterm tests.
6. MODULE DESCRIPTION
This module is designed to familiarize students with the fundamental concepts and
principles underlying the corporate finance and decisions of the firm. It will develop
analytical frameworks of corporate finance and enable a critical appreciation of the
interaction between financial decision-making and capital market behaviour. Issues
covered will include cash flows of a corporation, Time value of money, Valuation of
financial assets, Financing resources and methods, Effect of dividend policy on firm
value, Effect of capital structure on firm value. In order to achieve these objectives, we
will make use of some algebra and mathematics and the proper understanding of some of
the topics will require investment of some time in the comprehension of a few formulae
used.
7. OBJECTIVES/ LEARNING OUTCOMES
Knowledge
On completion of this module, the successful student will be able to:
1. critically evaluate the relevant concepts and principles of corporate finance with
respect to financing decision-making and working capital management;
2. critically evaluate investments appraisals techniques regarding their merits and
limitations;
3. criticise different theories that impact on valuation, capital structure and dividend
policy;
4. critically assess the advantages and disadvantages of different financing methods.
Skills
On completion of this module, the successful student will be able to:
5. forecast the financial performance of a corporation;
6. critically analyse relevant issues;
7. apply the analytical tools of corporate financial and investment analysis in capital
markets
8. work in a group, communicate effectively and make a presentation for a given topic
9. analyze relevant information, connect and intergrate information to support
argument, explain the problem as a whole, in a specific context
10. applying digital capabilities in professional activities and life-long learning
8. REQUIREMENT FOR ASSESSMENT

LEARNING OUTCOMES REQUIREMENT FOR STUDENTS REFERENCES

Understanding several - Understanding the nature of corporate Chapter 1

important problems of finance Corporate Finance (11th
corporate finance - Understanding the principles of Edition) by Ross, Westerfield,
corporate financial management Jaffe. McGraw-Hill, 2013.
- Understanding the important decisions
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in a corporation ISBN: 978-0-07-803477-0.

Understanding financial - Understanding the content of financial Chapter 2

statements and cash flow,
analyzing the cash flow in
corprorate finance
Understand time value of
money principle, analyzing
present value and future
value
statements and cash flows Corporate Finance (11th
- Understanding the difference between Edition) by Ross, Westerfield,
the cash flow in finance and cash flow in Jaffe. McGraw-Hill, 2013.
accounting ISBN: 978-0-07-803477-0.
- Calculating the cash flows in corporate
finance
- Understanding the methods to evaluate Chapter 4
discounted cashflows in enterprises. Corporate Finance (11th
- Understanding  present value and future Edition) by Ross, Westerfield,
value in theory and practice Jaffe. McGraw-Hill, 2013.
ISBN: 978-0-07-803477-0.

Understanding and applying - Understanding the process of some Chapter  5 + 6

the process to conduct major methods to evaluate the projects Corporate Finance (11th
different methods to - Applying different investment Edition) by Ross, Westerfield,
evaluate projects appraisals to evalutate projects Jaffe. McGraw-Hill, 2013.
- Comparing the results of different ISBN: 978-0-07-803477-0.
methods to make the appropriate
decisions
Understanding and applying - Understanding the concepts of bond and Chapter 8
the concept of bond and the bond valuation Corporate Finance (11th
process to value a bond - Predicting the future cash flows of bond Edition) by Ross, Westerfield,
and calculating the bond prices Jaffe. McGraw-Hill, 2013.
- Understanding different types of bond ISBN: 978-0-07-803477-0.
Understanding and applying - Understanding the concepts of stock Chapter 9
the concept of stock and the valuation Corporate Finance (11th
process to value a stock by - Applying the relevant dividend growth Edition) by Ross, Westerfield,
dividend growth model model to value a stock Jaffe. McGraw-Hill, 2013.
- Understanding the process to value a ISBN: 978-0-07-803477-0.
company based on the multiples
Understand the nature of - Understanding the concept of risk and Chapter 10 + 11
risk and return, predicting return Corporate Finance (11th
and analyzing risk of the - Understanding the relationship between Edition) by Ross,
assets and a portfolio risks and returns Westerfield, Jaffe. McGraw-
- Analyzing the risk and return of an Hill, 2013. ISBN: 978-0-07-
asset or a portfolio to make the 803477-0.
investment decisions

9. ASSESSMENT SCHEME
Your overall assessment will be based on a final unseen examination (60%), an element of
class test (30% in total), and your contribution to class (10%), broken down as follows:
 Two class tests, to be conducted in the lecture, at roughly 1/3 and 2/3 of the module,
each worth 15% of total mark
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 Your contribution to classes, including your ideas, volunteer to present solutions for
teacher’s questions and exercises, presentation for a given case study, etc.,  work 10%
of total grade.
In addition to the above, there is an opportunity to obtain “bonus” marks which will be
used to improve your final grade. This is done by volunteering to present the solutions for
the exercises and contribution to the lectures.
Exam Assessment Criteria
Grade D: Students are able to remember basic principles of corporate finance, and use
knowledge to solve some familiar situations. Students has frequent problems in
understanding and inaccuracies in calculation.
Grade C: Students achive D-standards and the basic knowledge of corporate finance,
understand the principles and can use relevant approaches to solve some situations.
Misunderstandings and inaccuracies may occur in some situations.
Grade B: Students get C-standards and have a relatively broad knowledge of corporate
finance including principles and practice. Have ability to apply relevant knowledge to
solve most of financial problems and give solutions. Some mistakes may occur in
unfamiliar situations.
Grade A: Students get B-standards and have a comprehensive knowledge of corporate
finance including principles and practice. Have ability to apply relevant knowledge to
solve financial problems and give deep solutions.

LEARNING Form of Test time

OUTCOMES examination
Understanding several Mid-term test 1 Writing Session 9
important problems of (after completing
corporate finance lectures of chapter
Understanding financial 1,2,3,4)
statements and cash flow,
analyzing the cash flow in
corprorate finance
Understand time value of
money principle, analyzing
present value and future value
Understanding and applying
the process to conduct
different methods to evaluate
projects
Understanding and applying Mid-term test 2 Writing Session 15
the concept of bond and the (after completing
process to value a bond lectures of chapter
Understanding and applying 5,6,7)
the concept of stock and the
process to value a stock by
dividend growth model
Understand the nature of risk
and return, predicting and
analyzing risk of the assets
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and a portfolio
Synthesis of all outcome Final exam Writing End of semester
standards modules

10. ACTIVITY ALLOCATION

 135-minute weekly classes  to impart knowledge and define the scope of coverage
for self-study.
 In the total of 16 studying sessions, there are at least 3 classes used for discussion
to explore the application of theory to practice, supplemented with exercise.
 The satisfactory participation in the lectures and seminars are essential for learning.
Total Notional Learning Hours: 36 (equivalent to 3 credits)
 Theories: 50%
 Seminars: 25%
 Self-studying: 25%
11. TEACHING AND LEARNING STRATEGIES
 Lectures, exercises are given by lecturers in class. Seminars will be held to explore
the application of theory to practice and supplemented with exercises.
 Students are expected to read through the lecture notes and learning materials
before the session where they will be covered; revise the concepts/calculations very
shortly after the lecture; submit coursework on time; get learning materials if
required.
12. LEARNING MATERIALS
Core learning materials:
 Corporate Finance (11th Edition) by Ross, Westerfield, Jaffe. McGraw-Hill,
2013. ISBN: 978-0-07-803477-0.
 Handouts ad materials (if available) will be provided before classes
Reference books:
 Principles of Corporate Finance (11 Edition) by Brealey, Myer, Allen. 2014.
th

ISBN 978-0-07-803476-3
Website:
 https://www.annualreports.com/
 https://www.wsj.com/
 https://www.sec.gov/edgar/search-and-access
 https://www.coursera.org/
 https://www.calculator.net/

13. SYLLABUS
Outcome standards Topics Main contents Timing
1 Understanding Chapter 1. 1.1. The corporate firm
several important Introduction to 1.2. What is corporate finance?
6
problems of Corporate 1.3. The importance of cash flows
corporate finance Finance 1.4. The goal of financial management
1.5. The agency problem and control
of the corporation
1.6. Regulations
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2 Understanding Chapter 2. 2.1. The Balance Sheet

financial statements Financial 2.2. The Income Statement
6
and cash flow, Statements and 2.3. Taxes
analyzing the cash Cash Flow 2.4. Net Working Capital
flow in corprorate 2.5. Financial Cash Flow
finance 2.6. The accounting statement of
cash flow
2.7 Cash Flow Management
3 Understand time Chapter 3. 3.1. Valuation: The one period case 6
value of money Discounted Cash 3.2. The multiperiod case
principle, analyzing Flow Valuation 3.3. Compouding periods
present value and 3.4. Simplifications
future value 3.5. Loan Amortization

4 Understanding and Chapter 4. 4.1. Net Present Value 6

applying the process Investment 4.2. The Payback period method
to conduct different Appraisals 4.3. The discounted payback period
methods to evaluate method
projects 4.4. The internal rate of return
4.5. Problems with the IRR approach
4.6. The Profitability Index
5 Midterm Test 1 3
6 Understanding and Chapter 5. Bond 5.1.Bonds and bond valuation
applying the concept Valuaion 5.2. Government and Corporate
6
of bond and the Bonds
process to value a 5.3. Bond Markets
bond 5.4. Inflation and Interest rates
5.5. Determinants of Bond Yields
7 Understanding and Chapter 6. Stock 6.1. The present value of common
applying the concept Valuation stock
6
of stock and the 6.2. Dividends Discount Model
process to value a 6.3. Comparables
stock by dividend 6.4. Valuing the entire firm
growth model
8 Understand the Chapter 7. Risk 7.1. Returns
nature of risk and and Return 7.2. Average Stock Returns and
3
return, predicting Risk-free returns
and analyzing risk of 7.3. Risk statistics
the assets and a 7.4. The return and risk for portfolio
portfolio
9 Midterm Test 2 3

10 Revision 3

14. LECTURERS
Mrs. Nguyen Quynh Tho  (PhD.)
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Phone number: 0989187686

Email: thonq@hvnh.edu.vn
Mrs. Bui Ngoc Phuong (MSc.)
 Phone number: 0974598915
 Email: phuongbn@hvnh.edu.vn
Mrs. Nguyen Thi Nga (MSc.)
 Phone number: 0912666353
 Email: nguyennga@hvnh.edu.vn
15. LECTURE AND SEMINAR SCHEDULE
TOPIC TIMING Main activities
1. Content:
- What is corporate finance?
- The importance of cash flows
- The goal of financial management
- The agency problem and control of the corporation
Chapter 1. - Regulations
Introduction 2. Readings: Chapter 1
Session 1 + 2 Corporate Finance (11th Edition) by Ross, Westerfield, Jaffe.
to Corporate
Finance McGraw-Hill, 2013. ISBN: 978-0-07-803477-0.
3. Student activities: Having lectures, using software/website to serve
individual needs in study, discussing a given case study individually
or in a group, presenting the ideas in front of the class, expressing
critical thinking; systems thinking
4. Assessement: attendance check, presentation, making an argument
with comprehensively supported evidence and consistent disciplines
1. Content:
- The Balance Sheet
- The Income Statement
- Taxes
- Net Working Capital
- Financial Cash Flow
Chapter 2. - The accounting statement of cash flow and Cash Flow Management
Financial 2. Readings: Chapter 2
Statements Session 3 + 4 Corporate Finance (11th Edition) by Ross, Westerfield, Jaffe.
and Cash McGraw-Hill, 2013. ISBN: 978-0-07-803477-0.
Flow 3. Student activities: Having lectures, solving problems with excel,
using software/website to serve individual needs in study, discussing a
given case study individually or in a group, presenting the ideas in
front of the class, expressing critical thinking; systems thinking

4. Assessement: attendance check, presentation, making an argument

with comprehensively supported evidence and consistent disciplines
Chapter 3. Session 5 + 6 1. Content:
Discounted - Valuation: The one period case
Cash Flow - The multiperiod case
Valuation - Compouding periods
- Simplifications
- Loan Amortization
2. Readings: Chapter 4
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Corporate Finance (11th Edition) by Ross, Westerfield, Jaffe.

McGraw-Hill, 2013. ISBN: 978-0-07-803477-0.
3. Student activities: Having lectures, solving problems with excel,
using software/website to serve individual needs in study, discussing a
given case study individually or in a group, presenting the ideas in
front of the class, expressing critical thinking; systems thinking

4. Assessement: attendance check, presentation, making an argument

with comprehensively supported evidence and consistent disciplines
1. Content:
- Net Present Value
- The Payback period method
- The discounted payback period method
- The internal rate of return
- Problems with the IRR approach
Chapter 4. - The Profitability Index
Investment Session 7 + 8 2. Readings: Chapter  5 + 6
Appraisal Corporate Finance (11th Edition) by Ross, Westerfield, Jaffe.
McGraw-Hill, 2013. ISBN: 978-0-07-803477-0.
3. Student activities: Having lectures, solving problems with excel,
using software/website to serve individual needs in study, discussing a
given case study individually or in a group, presenting the ideas in
front of the class, expressing critical thinking; systems thinking
4. Assessement: attendance check, presentation, making an argument
with comprehensively supported evidence and consistent disciplines
MID-
TERM Session 9
TEST 1
1. Content:
- Bonds and bond valuation
- Government and Corporate Bonds
- Bond Markets
- Inflation and Interest rates
Chapter 5. - Determinants of Bond Yields
Bond Session 10 2. Readings: Corporate Finance (11th Edition) by Ross, Westerfield,
Valuation Jaffe. McGraw-Hill, 2013. ISBN: 978-0-07-803477-0.
3. Student activities: Having lectures, solving problems with excel,
using software/website to serve individual needs in study, discussing a
given case study individually or in a group, presenting the ideas in
front of the class, expressing critical thinking; systems thinking
4. Assessement: attendance check, presentation, making an argument
with comprehensively supported evidence and consistent disciplines
Chapter 6. Session 11 + 12 1. Content:
Stock - The present value of common stock
Valuation - Dividends Discount Model
-Comparables
- Valuing the entire firm
2. Readings: Chapter 9
Corporate Finance (11th Edition) by Ross, Westerfield, Jaffe.
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McGraw-Hill, 2013. ISBN: 978-0-07-803477-0.

3. Student activities: Having lectures, solving problems with excel,
using software/website to serve individual needs in study, discussing a
given case study individually or in a group, presenting the ideas in
front of the class, expressing critical thinking; systems thinking
- Assessement: attendance check, presentation, making an argument
with comprehensively supported evidence and consistent disciplines
1. Content:
- Returns
- Average Stock Returns and Risk-free returns
- Risk statistics
- The return and risk for portfolio
Chapter 7. 2. Readings: Chapter 10 + 11
Risk and Session 13+ 14 Corporate Finance (11th Edition) by Ross, Westerfield, Jaffe.
Return McGraw-Hill, 2013. ISBN: 978-0-07-803477-0.
3. Student activities: Having lectures, solving problems with excel,
using software/website to serve individual needs in study, discussing a
given case study individually or in a group, presenting the ideas in
front of the class, expressing critical thinking; systems thinking
4. Assessement: attendance check, presentation, making an argument
with comprehensively supported evidence and consistent disciplines
MID-
TERM Session 15
TEST 2
Revision Session 16