LESSON PLAN: 21MBA24 CORPORATE FINANCE

1. Introduction to the Course

Corporate finance is the study of a business's money-related decisions, which are essentially all of
a business's decisions. Despite its name, corporate finance applies to all businesses, not just
corporations. The primary goal of corporate finance is to figure out how to maximize a company's
value by making good decisions about investment, financing and dividends. In other words, how
should businesses allocate scarce resources to minimize expenses and maximize revenues? How
should companies acquire these resources through stock or bonds, owner capital or bank loans.
The objective of this course is to help the students to understand the conceptual framework of
financial management, and provide exposure to the various types of decisions the financial
managers are required to make under various environmental constraints.

2. Course Content
1. Overview of Financial Management and Time Value of Money.
2. Cost of Capital
3. Investment Evaluation Techniques
4. Foreign Exchange Market
5. Capital Markets and Capital Structure

3. Course Outcomes:

Code Course Outcome Program Outcome

CO241 Understand clearly the objectives of Financial Management, PO6
ability to take business decisions by considering time value of
money.
CO242 Able to analyse the various sources of capital along with the PO6
cost associated and understand clearly the appropriate way to
evaluate the business proposals using discounted and non
discounted techniques.
CO243 Able to understand the foreign exchange market and the PO6
determinants of exchange rate and to calculate the spot,
forward and cross exchange rates.

4. Prescribed Readings:

1. Khan M.Y and P.K Jain, 8th Edition, Financial Management, McGraw Hill, Delhi; 2018
2. Pandey, I.M : Financial Management, Vikas Publishing House, Delhi, 2014
3. 3.N.R Parashuraman, Financial Management- A step by step Approach, Cengage Publication,
New Delhi
4. Eun & Resnick, International Finance Management, 4/E, Tata McGraw Hill
 LESSON PLAN: 21MBA24 CORPORATE FINANCE

5. Session-wise Plan (One session is 1 hour)

Sessions Topic Pedagogy Required Readings
1-8 Financial Management: Lecture / 1. 1. Khan M.Y and P.K Jain, 8 th Edition, Financial
Introduction to finance, nature Discussions Management, McGraw Hill, Delhi; 2018
and scope of finance 2. Pandey, I.M : Financial Management, Vikas
Publishing House, Delhi, 2014
Fundamental principles Lecture / 2.1. Khan M.Y and P.K Jain, 8 th Edition, Financial
objectives of financial Discussions Management, McGraw Hill, Delhi; 2018
management – profit 3.2. Pandey, I.M : Financial Management, Vikas
maximization and wealth Publishing House, Delhi, 2014
maximization 4.3.N.R Parashuraman, Financial Management- A
step by step Approach, Cengage Publication,
New Delhi
Functions of Financial Lecture / 5.1. Khan M.Y and P.K Jain, 8 th Edition, Financial
Management: investment, Discussions Management, McGraw Hill, Delhi; 2018
financing and dividend decisions. 6.2. Pandey, I.M : Financial Management, Vikas
Publishing House, Delhi, 2014
7.3.N.R Parashuraman, Financial Management- A
step by step Approach, Cengage Publication,
New Delhi
Time value of Money: Lecture / 8.1. Khan M.Y and P.K Jain, 8 th Edition, Financial
Compounding and Discounting Discussions Management, McGraw Hill, Delhi; 2018
and 9.2. Pandey, I.M : Financial Management, Vikas
Problem Publishing House, Delhi, 2014
Solving 3.N.R Parashuraman, Financial Management- A
step by step Approach, Cengage Publication,
New Delhi
First Internal Assessment Test
9-16 Cost of Capital: Factors affecting Lecture / 1. Khan M.Y and P.K Jain, 8 th Edition, Financial
cost of capital Discussions Management, McGraw Hill, Delhi; 2018
and 2. Pandey, I.M : Financial Management, Vikas
Problem Publishing House, Delhi, 2014
Solving 3.N.R Parashuraman, Financial Management- A
step by step Approach, Cengage Publication,
New Delhi
Calculation of cost of debt, Lecture / 1. Khan M.Y and P.K Jain, 8 th Edition, Financial
preference capital, equity capital Discussions Management, McGraw Hill, Delhi; 2018
and retained earnings, and 2. Pandey, I.M : Financial Management, Vikas
Combined cost of capital, WACC. Problem Publishing House, Delhi, 2014
Solving 3.N.R Parashuraman, Financial Management- A
step by step Approach, Cengage Publication,
New Delhi
17-24 Investment decisions : Capital Lecture / 1. Khan M.Y and P.K Jain, 8 th Edition, Financial
Budgeting: Nature of investment Discussions Management, McGraw Hill, Delhi; 2018
decisions and 2. Pandey, I.M : Financial Management, Vikas
Problem Publishing House, Delhi, 2014
Solving 3.N.R Parashuraman, Financial Management- A
step by step Approach, Cengage Publication,
 LESSON PLAN: 21MBA24 CORPORATE FINANCE

New Delhi
Investment evaluation Lecture / 1. Khan M.Y and P.K Jain, 8 th Edition, Financial
techniques: net present value, Discussions Management, McGraw Hill, Delhi; 2018
internal rate of return, and 2. Pandey, I.M : Financial Management, Vikas
profitability index, pay-back Problem Publishing House, Delhi, 2014
period, accounting rate of Solving 3.N.R Parashuraman, Financial Management- A
return; NPV and IRR comparison; step by step Approach, Cengage Publication,
Estimation of cash flow for new New Delhi
project, replacement projects
Second Internal Assessment Test
25-31 Foreign Exchange Market: Lecture / 1. Khan M.Y and P.K Jain, 8th Edition, Financial
Functions, characteristics, Discussions Management, McGraw Hill, Delhi; 2018
organization, and and 2. Pandey, I.M : Financial Management, Vikas
participants, arbitrage in Problem Publishing House, Delhi, 2014
Solving 3.N.R Parashuraman, Financial Management- A
foreign exchange market.
step by step Approach, Cengage Publication,
New Delhi
4. Eun & Resnick, International Finance
Management, 4/E, Tata McGraw Hill
Foreign exchange rates and Lecture / 1. Khan M.Y and P.K Jain, 8 th Edition, Financial
its determinations: exchange Discussions Management, McGraw Hill, Delhi; 2018
rate, spot, forward and cross and 2. Pandey, I.M : Financial Management, Vikas
exchange rates. Problem Publishing House, Delhi, 2014
Solving 3.N.R Parashuraman, Financial Management- A
step by step Approach, Cengage Publication,
New Delhi
4. Eun & Resnick, International Financ
Management, 4/E, Tata McGraw Hill
Submission of Workbook
32-38 Capital Structure decisions: Lecture / 1. Khan M.Y and P.K Jain, 8 th Edition, Financial
Planning the Capital Structure Discussions Management, McGraw Hill, Delhi; 2018
and 2. Pandey, I.M : Financial Management, Vikas
Problem Publishing House, Delhi, 2014
Solving 3.N.R Parashuraman, Financial Management- A
step by step Approach, Cengage Publication,
New Delhi
Leverages: Determination of Lecture / 1. Khan M.Y and P.K Jain, 8 th Edition, Financial
operating leverage, financial Discussions Management, McGraw Hill, Delhi; 2018
leverage and total leverage, and 2. Pandey, I.M : Financial Management, Vikas
Leverage and Financial Distress Problem Publishing House, Delhi, 2014
Solving 3.N.R Parashuraman, Financial Management- A
step by step Approach, Cengage Publication,
New Delhi
Dividend policy: Factors Lecture / 1. Khan M.Y and P.K Jain, 8 th Edition, Financial
affecting the dividend policy, Discussions Management, McGraw Hill, Delhi; 2018
Alternative Forms of Dividend. 2. Pandey, I.M : Financial Management, Vikas
Publishing House, Delhi, 2014
3.N.R Parashuraman, Financial Management- A
step by step Approach, Cengage Publication,
New Delhi
Stock Market and Derivatives: Lecture / 1. Khan M.Y and P.K Jain, 8 th Edition, Financial
 LESSON PLAN: 21MBA24 CORPORATE FINANCE

Introduction to the stock Discussions Management, McGraw Hill, Delhi; 2018

market, Basic concepts; Types of
derivatives: Forward, Options,
Swaps
39 Business Plan Presentation
2. Pandey, I.M : Financial Management, Vikas
Publishing House, Delhi, 2014
3.N.R Parashuraman, Financial Management- A
step by step Approach, Cengage Publication,
New Delhi

6. Student Assessment Guidelines:

A. Details of Evaluation Components (mid-term & end-term)
Weightage (%) Duration (Min) Schedule in the
session plan
Internal Exam – 1 10 40 After session 8
Internal Exam – 2 10 40 After session 24
End Term Exam 50 180

B. Details of Evaluation Components (other than mid-term& end-term)

Weightage
Type of Assessment Schedule in the session plan
(%)
Quiz 10 During the session 10
Workbook 10 After completing session 16
Business Plan Presentation 10 After completing session 38

C. Guidelines for Submitting Assignments

Workbook
1. Comment on the Economic Value Added (EVA) of top 10 firms of the Industry.

Sl No Name of the NOPAT Cost of EVA Rank

Firm Capital
1
2
3
4
5
6
7
8
9
10
 LESSON PLAN: 21MBA24 CORPORATE FINANCE

Note: The criteria for identifying top 10 companies can be a firm size. You may consider Total
Sales, Market Capitalization, PAT, No of Employees etc as a proxy for Firm Size.

2. Analyze the valuations of top 10 firms in the Industry.

Sl. No Company Name Value of the firm

1
2
3
4
5
6
7
8
9
10
Note: Please justify the measure of value.

3. Comment on the capital structure of top 10 companies of the Industry.

Sl No Company Ke Kd Kp WACC (Ko) Industry

Name Average
1
2
3
4
5
6
7
8
9
10

4. Analyze the working capital requirement of top 10 companies of the industry.

Sl No Firm Name Current Assets Current Liabilities Working

Capital
Required
1
2
3
4
5
6
7
8
9
10
 LESSON PLAN: 21MBA24 CORPORATE FINANCE

5. Compare the Dividend history of top 10 companies of the industry (Descriptive Answers)

6. Analyze the stock price of top 10 companies of the industry.

Sl Company PREV CLOSE OPEN HIGH LOW QTY 52WH 52WL PE BSE
No Name CLOSE
1
2
3
4
5
6
7
8
9
10

7. Write about the recent developments in the Industry.

8. Make a Comparative analysis with regard to financials of top two companies of the selected
industry.
9. A project having a life of ten years has a following stream of year-end cash flows. Using
appropriate measure justify whether to accept or reject the project proposal for the selected
ten companies of the industry.

Year Cash flow after tax (CFAT)

0 (1,25,00,000)
1 15,00,000
2 20,00,000
3 18,00,000
4 24,00,000
5 32,00,000
6 19,00,000
7 23,00,000
8 25,00,000
9 18,00,000
10 14,00,000

Company Name PVCIF PVCO NPV Decision

Assignment 2:
 LESSON PLAN: 21MBA24 CORPORATE FINANCE

The group is expected to prepare a business plan with complete financial details. You are
supposed to make a clear analysis of the source of capital and also forecast the cash flows in
order to check the feasibility of the project. Feasibility of the project can be evaluated using
discounting technique for the anticipated future cash flows. Business plan should also include:

a) Investment analysis / Fund Estimation ( prepare a opening Balance Sheet for your
company showing fund raised and the fund allocation)
b) Using realistic judgment estimate the cost of capital.
c) Forecast future cash flows ( both inflows (revenues) and outflows (expenses) )
d) Check the feasibility of the project.
e) Make your decision as to accept or reject the business proposal.
 Medium of presentation- Power point presentation
 Time allotted is 30 + 10 minutes. You are expected to utilize the time fully and
not exceed limits or finish early.
 Any person from the group may be asked to present randomly.

The group should submit a detailed report of a business plan. Submission date will be intimated
during the regular classes.

 It should contain a Table of contents, an Executive Summary and sources and

references should be mentioned wherever necessary.
 It should be Times New Roman, font size 12, justify and 1.5 spacing
 Page numbers are also required.

Course Instructor : _______________________________________

Director: __________________________________________________
 LESSON PLAN: 21MBA24 CORPORATE FINANCE

RUBRICS: 21MBA24 CORPORATE FINANCE

1. Course Outcomes
Course Activity
Outcome
CO241 Quiz
CO242 Workbook
CO243 Business Plan Presentation

2. Rubrics for CIE Assessment

CO Activity Exceeds Meets expectations Below expectations
expectations
CO241 Quiz Score >7 Score 5 - 7 Score <5
CO242 Workbook An orderly The work done is Poor language,
presentation of the neatly documented incomplete
work with total clarity and presented in information and poor
on flow of thoughts acceptable format. formatting.
by documenting as
per prescribed
standards.
CO243 Business Collective planning All members of the Poor work
Plan and distribution of the group actively distribution and only
Presentation work among group participate in the a few members of
members and project work. the group are
demonstrate its performing.
impact on group
performance.