JAIPURIA INSTITUTE OF MANAGEMENT

POST GRADUATE DIPLOMA IN MANAGEMENT

BATCH 2022-24

Course Code and title 10202: Corporate Finance

Credits 3

Term and Academic Year II Term, 2022 -23

Course Pre-requisite(s) Accounting for Business

Course Requirement(s) Knowledge of spreadsheet applications

and Basics of Statistics

Classroom # (Location)

Course Instructor Dr Sushma Vishnani

Email sushma.vishnani@jaipuria.ac.in

Telephone Number (for office 9838763160

appointments)

Student Consultation Hours

Office location Dr Sushma Vishnani: Faculty Room No 11

1. Course Overview
The introductory course of Corporate Finance has been designed for business management
students to provide them with an overview of the financial environment in which a firm operates
and is concerned with the creation and maintenance of wealth in a rational way. Financial
Management is a managerial activity that calls for planning and controlling of the firm’s
financial resources. In its endeavour, it focuses on decision making. Almost all decisions taken
by an individual or a business firm have financial aspects and implications. Financial
management is the study of decisions that have financial implications and mainly comprise of
investing, financing and dividend decisions.
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The course has been divided into six different modules which would take students from
understanding the role of the financial manager of a firm in achieving the goal of the firm.
Students will learn how a finance manager measures risk and return associated with any business
activity and takes an investment decision if compensation for taking risk is optimal. Students will
also learn how finance manager decides upon the optimal capital structure, profit distribution and
working capital management. Further, a good knowledge of Corporate Finance will help the
students to develop their understanding in other domains like Marketing, Operations and
Human Resource Development as all planning and execution and performance measurement
finally take shape in the form of financial figures. Return on investment reign supreme in any
business/ economic environment
2. Course Learning Outcomes

On successful completion of the course, you should be able to:

CLO1: Apply financial tools for decision making

CLO2: Analyze the long-term financial decisions of a business firm
CLO3: Analyze the short-term financial decisions of a business firm
CLO4: Identify ethical dilemmas in financial decisions

Mapping of CG-CLO

CG1 CG2 CG3 CG4 CG5

Communicate Demonstrate Apply Evaluate Awareness

Effectively the Ability to relevant different of impact of
Work in Teams conceptual ethical business
to Achieve frameworks perspectives decisions on
Desired Goals to a given issues of
business social
situation concern

CLO 1 X(R)

CLO2 X(I) X(R)

CLO 3 X(I)

CLO 4 X(I)

Mapping of PLO-CLO

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 PLO 1 PLO 2 PLO 3 PLO 4 PLO 5 PLO 6

Communicat Demonstrat Reflect on Evaluate Comprehend Exhibit

e Effectively e the Ability business different sustainabilit innovativ
to Work in situations ethical y issues e and
Teams to and apply perspective creative
Achieve relevant s thinking
Desired conceptual
Goals framework
s

CLO X(R)
1

CLO2 X(I) X(R)

CLO X(I)
3

CLO X(I)
4

3. Course Modules

Overview of Corporate Finance and Risk-
Return
Time Value of Money (TVM)
 Corporate Finance and Role of Financial
Manager
 Goal of a Firm, Agency Issue, Ethics in
Business
 Risk and return relationship
 Measures of Risk
 Risk diversification through portfolio
formation
 Systematic Risk vs. Unsystematic risk
 Beta concept, CAPM Model
 Concept and importance of TVM
 Present Value (PV) calculation
 Future Value (FV) calculation
 Annuities
 Perpetuities
 Mixed streams

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Long-term Investment Decisions  Overview of Capital Budgeting
 Pay-Back Period, NPV, IRR. MIRR

 Project evaluation – financial, ethical

 Estimating cost of various sources of capital

 WACC
Cost of Capital and Long-term Financing
 Capital structure and value of firm
Decisions
 Optimal capital structure
 Benefits and costs of using debt
 Types of Dividends
 Dividend Policy Issues, information
Dividend Decisions
content/signaling
 Clientele effect
 Establishing dividend policy
 Stock dividends & stocks splits, stock
repurchase
 Current assets investment policies
 Current assets financing policies
Working Capital Management
 Cash conversion cycle

4. Text Book

Parrino, R., & Kidwell, D. (2017). Fundamentals of Corporate Finance. New Delhi: Wiley India
Edition.
Suggested reference books:
 Brealey, R. A., Myers, S. C., Allen, F., 13th Edition (2020). Principles of Corporate
Finance. New Delhi: Tata McGraw- Hill.
 Brigham, E. F., & Houston, J. F. (2004). Fundamental of Financial Management (16th
Edition ed.). New Delhi: South Western -Cengage Learning India Private Limited.
 Megginson, W. L., Smart, S. B., & Gitman, L. J. (2007). Principles of Corporate
Finance. New Delhi: Cengage Learning India Private Limited.
 Damodaran, A.(2004).Corporate Finance - Theory and Practice (Second Edition) New
Delhi:Wiley India (P) Ltd.
 Bodhanwala, R. J. (2009). Financial Management Using Excel Spreadsheet. New Delhi:
Taxmann Publication.

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5. Assessment Tasks
Assessment Item Description Weightage CLO
Quiz There shall be 2 Quizzes, 10 % CLO1, CLO2
one for CLO 1 and other for
CLO 2.

Each Quiz shall comprise of

at least 10 MCQs. These will
be administered on LMS.
Minimum 30-questions’
Question bank will be
prepared and used for this
purpose.

Instructor may conduct

additional quizzes as a part of
formative assessment from
time to time.
Written case analysis Class test shall be 10% CLO4
administered which will
assess the students’
capability in identifying the
ethical issues involved in
the given case let.
Build your model Each student will be 10% CLO1
Exercise required to build an excel
model depicting the
application of time value of
money concepts.
Group Project This should be a 25% CLO2
comprehensive project and
shall have elements of
Investing, Financing and
Dividend decisions, thus
covering the substantial
portion of the Corporate
Finance course.

Group project for each set

of students (i.e. Project
Group) shall be specific to
given industry/sector.

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 Class Performance Essentially formative 5%
assessment, shall capture the
students’ performance in class
activities on a regular basis;
Students’ preparedness for
each class; Ideas and relevant
& new things one adds to the
class room discussion
(essentials and desirable
components under VED
analysis) shall be considered.
Suggested important markers:
 Frequency of
participation
 Quality of deliberation
& comments
 Listening skills
End-Term Question paper will assess 40% CLO2, CLO3
Examination the student’s ability to
analyse the financial
decisions of a firm.

RUBRICS FOR ASSESSMENT COMPONENTS

RUBRICS FOR WRITTEN CASE ANALYSIS (10 Marks) (CLO 4)

Traits Below Meets Exceeds
Expectations Expectations Expectation
Marks in % Marks in % Marks in %
(less than 40%) (40% - 60% ) (more than
60%)
Identify ethical issues Little or no Identifies ethical Identifies
recognition of issues with some multiple ethical
Be able to recognize ethical pertinent discussion of the issues with
consequences of financial ethical issues most important complete
decisions in a business firm in a given applicable discussion of
situation. values. the values and
a framework for
resolution.

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RUBRICS FOR END TERM (40 Marks) (CLO2 & CLO3)
Traits Below Meets Exceeds
Expectations Expectations Expectation
Marks in % (less Marks in % Marks in %
than 40% ) (40% - 60% ) (more than
60%)
Select and Use Relevant Concepts and Has limited Selects and uses Selects and uses
Frameworks knowledge on relevant concepts relevant concepts
selecting and and frameworks. and frameworks.
 Demonstration of analytical skills & using relevant Requires minimal Needs no
logical reasoning based on concept, concepts and assistance in assistance in
theories, practices, regulatory frameworks. choosing relevant selecting relevant
framework relating to financial Requires concepts and concepts and
decisions such as investing, financing, extensive frameworks. frameworks.
dividend and working capital understanding
management. about selecting
relevant concepts
and
frameworks.

RUBRICS FOR PROJECT ASSIGNMENT (20 Marks) (CLO2)

Traits Below Meets Exceeds
Expectations Expectations Expectation
Marks in % (less Marks in % Marks in %
than 40% ) (40% - 60% ) (more than
60%)
Gather Relevant Information:
(Weightage -30%) Struggles to Clearly identifies Demonstrates a
 About the Organisation under study viz. pinpoint the the information sophisticated
Firm/ companies/industry from reliable information required. understanding of
sources needed. what information
 Assuring evidence of search /selection / Gathers information is needed.
collection of data, correctness and Gathers from multiple valid
completeness of data and information information from and reliable Gathers extensive
 Presentation of the gathered one source. sources. information from a
information in proper format & Style variety of valid and
Minimal evidence Evidence of reliable sources
of appropriate appropriate including journals,
search/selection search/selection texts, etc., specific
criteria. criteria. to the subject.

Unable to reflect Able to reflect and Clear evidence of

and comprehend understand the appropriate
the business business situation search/selection
situation due to because of the criteria.
poor understanding quality of
of required information Able to reflect and
information. gathered and have a holistic view
synthesized. of the business
situation based on
extensive

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 information
gathered from a
variety of sources
Select and Use Relevant Concepts and Has limited Selects and uses Selects and uses
Frameworks knowledge on relevant concepts relevant concepts
(Weightage -70%) selecting and and frameworks. and frameworks.
using relevant Requires minimal Needs no
 Demonstration of analytical skills & concepts and assistance in assistance in
logical reasoning based on concept, frameworks. choosing relevant selecting relevant
theories, practices, regulatory Requires concepts and concepts and
framework relating to long term extensive frameworks. frameworks.
financial decisions. assistance in
selecting relevant
concepts and
frameworks.

RUBRICS TO ASSESS THE GROUP PERFORMANCE OF STUDENTS DEMONSTRATING THE ABILITY

TO WORK AS TEAM(as an allied component of group project) (5M)(CLO 2 component mapped with CG2/PLO2)

Criterion Below Expectations Meets Expectations Exceeds Expectation

Marks in % (less than Marks in % (40% - 60% ) Marks in % (more than 60%)
40% )
Participation in Rarely listens to, shares Usually listens to, shares, Almost always listens to, shares
Group Tasks with, and supports the with, and supports the with, and supports the efforts of
(Based on peer efforts of others. efforts of others. others.
review)
Often is not a good team Tries to keep people working well
player together.
Contribution Rarely provides useful Usually provides useful Routinely provides useful ideas
ideas when participating ideas when participating in a when participating in a group
in a group task. group task. task.

May refuse to participate A strong group member who A leader who contributes a lot of
tries hard effort
Attitude Is often publicly critical Is rarely publicly critical of Is never publicly critical of the
of the project or the work the project or the work of project or the work of others.
of other members of the others.
group. Always has a positive attitude
Often has a positive attitude about the task(s)
Is often negative about about the task(s)
the task(s)

RUBRICS FOR BUILD YOUR MODEL EXERCISE (CLO1)

Traits Below Expectations Meets Expectations Exceeds
Expectation
Marks in % (less than Marks in % (40% - Marks in % (more
40%) 60% ) than 60%)
Excel Functions Student is not able to Student is able to apply Students is able to
apply context-based partially context-based apply most of context-

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 (50%) formula/function to formula/function to based
extract relevant extract relevant formula/function
information for a given information for a given extract relevant
situation. situation information for a
given situation
Select and Use Has limited knowledge Selects and uses relevant Selects and uses
Relevant Concepts on selecting and using concepts and relevant concepts
and Frameworks relevant concepts and frameworks. Requires and frameworks.
(50%) frameworks. Requires minimal assistance in Needs no assistance
 Demonstration extensive understanding choosing relevant in selecting relevant
of analytical about selecting relevant concepts and concepts and
skills & logical concepts and frameworks. frameworks.
frameworks.
reasoning based
on concepts,
theories and
practices
relating to time
value of money

RUBRIC FOR QUIZZES (10 Marks) (CLO-1, 2)

Criteria Exceed Meet Expectation Below

Expectation Expectation
Demonstrate the level Answers 60% or Answers 40% or more Answers less than
of understanding of more questions but less than 60% 40% questions
concepts learned. correctly questions correctly correctly

6. Session Plan

Sess Topic/ Sub Topic Reading Pedagogy Session Learning CLO

ion Reference Outcomes

Module I: Overview of Corporate Finance and Risk-Return

1. Introduction to Chapter 1 Class At the end of the CLO4

Corporate Finance, discussion session, the student
Role of Financial will be able to
Manager, Goal of describe the basics
firm, Agency Warm up of corporate
conflicts, Importance news finance, primary

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 of ethics in business story/video goal of firm, agency
issues and relevance
of ethics in business

2. Concept of risk and Chapter 7 Class At the end of the CLO1

return, relationship discussion, session, the student
between them, Numerical will be able to
Measurement of risk exercises measure the risk and
and return return in standalone
context.

3. Risk and Chapter 7 Class At the end of the CLO1

diversification, Discussion session, the student
Systematic risk and will be able to explain
unsystematic risk Numerical how and why
exercises diversified portfolio
reduces risk.

4. Beta and CAPM Chapter 7 Class At the end of the CLO1

discussion session, the student
will be able to
Spreadsheet measure systematic
exercises risk and explain the
concept of CAPM
and limitations of
CAPM

Module II: Time Value of Money

5. Introduction to TVM, Chapter 5 Class At the end of the CLO1

Time lines, discussion session, the student
Compounding and will be able to
discounting Spreadsheet compute PV and FV
exercises in various situations

6. FV and PV of multiple Class At the end of the CLO1

cash flows, Annuities, Chapter 6 discussion session, the student
Perpetuities. will be able to
Spreadsheet estimate PV of
exercises perpetual stream of
cash flows and PV
and FV of annuities

7. Practice Session – Case lets Spreadsheet At the end of the CLO1

application of TVM exercises session, the student
in financial planning will be able to apply

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 situations the concepts
learned in TVM to
real life finance
problems
Module III: Long-term Investment Decisions

8. Introduction to capital Chapter 10 Class At the end of the CLO2

budgeting Discussion session, the student
Case study will be able to
explain the
relevance of capital
budgeting decisions
for a firm and the
ethical dimensions
of it.
9. Capital budgeting Chapter 10 Class At the end of the CLO2
techniques, NPV, PP, Discussion session, the student
IRR, MIRR will be able to apply
capital budgeting
techniques
Numerical
exercises

10. Practice session Case study Peer learning At the end of the CLO2
activity session, the student
will be able to apply
the concepts of
capital budgeting

Module IV: Cost of Capital and Long-term Financing Decisions

11. Firm’s overall cost of Chapter 13 Class At the end of the CLO2
capital discussion session, the student
Case Study will be able to
explain the concept
of cost of capital

12. Estimating cost of Chapter 13 Class At the end of session, CLO2

debt, cost of equity discussion the student will be
Case Study

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 and WACC Case study able to compute cost
related of debt, cost of equity
calculations and WACC

13.Capital structure and Chapter 16 Class At the end of the CLO2

firm value discussion session, the student
will be able to explain
how capital structure
may influence firm
value

14.Optimal Capital Chapter 16 Spreadsheet At the end of the CLO2

Structure exercise session, the student
will be able compute
WACC and firm
value for various
levels of debt-equity
ratio

15.Theories of capital Chapter 16 Class At the end of the CLO2

structure, trade-off discussion session, the student
theory, pecking order will be able to
theory
explain the
concepts of capital
structure theories

Module V: Dividend Decisions

16.Dividends Chapter 17 Class At the end of the CLO2

fundamentals, types of discussion session, the student
dividends, signalling will be able to
theory of dividends, explain the various
Stock repurchases types of dividends

17.Stock dividends and Chapter 17 Class At the end of the CLO2

stock splits, dividend Discussions session, the student
policy and firm value will be able to
explain the factors
influencing
dividend policy of a
firm

Module VI: Working Capital Management

18. Working capital Chapter 14 Class At the end of the CLO3

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 basics, operating and discussion session, the student
cash conversion Numerical will be able to
cycles exercises calculate operating
and cash conversion
cycle of a firm

19.Working capital Chapter 14 Class At the end of the CLO3

investment and discussion session, the student
financing strategies, will be able to
Sources of short-term understand the
financing liquidity-profitability
trade-off involved in
working capital
management
strategies

20.Ethics in finance Case lets Case At the end of the CLO4

analysis session, the student
will be able to
identify the ethical
dilemma involved
in financial
decisions

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