Course Title Corporate Finance

Course Code F204

Term(s) Term I&II
Course Credit 3

Introduction to the Course: The

Corporate Finance course focuses at introducing the students about the various aspects of
corporate finance which facilitates the decision making domain pertaining to financing, investment and dividend
decisions. This course aims at providing the inputs related to the three major decision areas of financial management of
an organization. This course will give the introduction and conceptual understanding about the various topics of
corporate finance.
Course objective:
1. To introduce the student to fundamentals of corporate finance
2. To familiarize the student with basic sources of raising capital through bonds and equity, risk and return
associated
3. To develop an ability to assess cost of capital
4. To identify various decision variables in the areas of financing, investment and dividend decisions and apply
relevant tools and techniques

Prerequisites, if any, mention: Basics of Accounting & Finance

SESSION PLAN
Total # of Modules = 30 sessions of 1each

1
 # Topic Type of Session Training Aids Preparation Learning
Objectives
Module 1: Fundamentals of Financial Management, Functions of Corporate Finance
1 Corporate Finance: Lecture and Laptop and ➢ Corporate Finance by Stephen A. Ross, Randolph Westerfeild,
introduction, types of class room Projector Jeffrey Jafe, Tata McGraw Hill
firms, ownership and discussion
control, functions and
objectives
Module 2: Risk and Return, Valuation of Bonds and Shares
2&3 Risk and Return: Lecture and Laptop and ➢ Corporate Finance by Stephen A. Ross, Randolph Westerfeild, GLG 4-
historical and class room Projector Jeffrey Jafe, Tata McGraw Hill L1,L2,L3
expected returns, risk discussion
measurement
4,5,6 Risk and Return: Lecture and White Board ➢ Corporate Finance by Stephen A. Ross, Randolph Westerfeild, GLG 4-
concept of beta, Problem Jeffrey Jafe, Tata McGraw Hill L1,L2,L3
CAPM, SML, CML Solving ➢ Financial Management by Prasanna Chandra, Tata Mc Graw Hill

7&8 Valuation of Bonds Lecture and Laptop and ➢ Corporate Finance by Stephen A. Ross, Randolph Westerfeild, GLG 4-
and Shares: class room Projector Jeffrey Jafe, Tata McGraw Hill L1,L2,L3
bond cash flows, discussion ➢ Financial Management by Prasanna Chandra, Tata Mc Graw Hill
price and yields
bond theorems,

9&10 Valuation of Bonds Lecture and Laptop and ➢ Corporate Finance by Stephen A. Ross, Randolph Westerfeild, GLG 4-
and Shares: class room Projector Jeffrey Jafe, Tata McGraw Hill L1,L2,L3
bond theorems, discussion ➢ Financial Management by Prasanna Chandra, Tata Mc Graw Hill
duration,
immunisation and
convexity

11 Valuation of Shares- Lecture and Laptop and ➢ Corporate Finance by Stephen A. Ross, Randolph Westerfeild, GLG 4-
dividend discount class room Projector Jeffrey Jafe, Tata McGraw Hill L1,L2,L3
methods discussion Financial Management by Prasanna Chandra, Tata Mc Graw Hill
12 Valuation of Shares- Problem White Board ➢ Corporate Finance by Stephen A. Ross, Randolph Westerfeild, GLG 4-
intrinsic value Solving Jeffrey Jafe, Tata McGraw Hill L1,L2,L3
estimation ➢ Financial Management by Prasanna Chandra, Tata Mc Graw Hill

Module 3 : Cost of Capital

GLG 4-

2
 13 Cost of Capital: Presentation Laptop and Projector ➢ Finance by Stephen A. Ross, Randolph Westerfeild, Jeffrey L1,L2,L3
different methods for Jafe, Tata McGraw Hill
computing cost of ➢ Financial Management by Prasanna Chandra, Tata Mc Graw
equity. Hill

GLG 4-
14 Cost of Capital Problem White Board ➢ Corporate Finance by Stephen A. Ross, Randolph L1,L2,L3
determination of Solving Westerfeild, Jeffrey Jafe, Tata McGraw Hill
Weighted Average ➢ Financial Management by Prasanna Chandra, Tata Mc Graw
Cost of Capital
(WACC) Hill

15 Cost of Capital : Case Study Midland Energy Resources, INC. : Cost of Capital GLG 4-
Source: HBS Brief
determination of cost L1,L2,L3
of debt, preferred Cases
stock and Weighted Timothy A. Luehrman; Joel L. Heilprin GLG 5 –
Average Cost of Product #: 4129- L1,L2, L3
Capital (WACC), PDF-ENG
impact of taxes

Module 4: Capital Structure, Financing and Dividend Patterns

GLG 4-
16 Capital Structure ➢ Corporate Finance by Stephen A. Ross, Randolph L1,L2,L3
Theories: Equity and Westerfeild, Jeffrey Jafe, Tata McGraw Hill
Debt Financing, Lecture and
class room Laptop and Projector ➢ Financial Management by Prasanna Chandra, Tata Mc Graw
Concept of Financial
Leverage, discussion Hill
Different Capital
Structure theories
GLG 4-
17 Capital Structure L1,L2,L3
Theories: Equity and Source: HBS Brief
Cases Paramount Equipment GLG 5 –
Debt Financing,
Concept of Financial Case Study Carliss Y. Baldwin; Wei Wang L1,L2, L3
Leverage, Product #: 914557-
Different Capital PDF-ENG
Structure theories
GLG 4-
18 Capital Structure Lecture and Laptop and Projector ➢ Corporate Finance by Stephen A. Ross, Randolph L1,L2,L3
Theories: Equity and

3
 Debt Financing, class room Westerfeild, Jeffrey Jafe, Tata McGraw Hill
Concept of Financial discussion ➢ Financial Management by Prasanna Chandra, Tata Mc Graw
Leverage, Hill
Different Capital
Structure theories
GLG 4-
19&20 Dividend Decision ➢ Corporate Finance by Stephen A. Ross, Randolph L1,L2,L3
Lecture and
Policies, distribution Westerfeild, Jeffrey Jafe, Tata McGraw Hill
class room Laptop and Projector
to share holders, ➢ Financial Management by Prasanna Chandra, Tata Mc Graw
discussion
declaration patterns, Hill
chronology
GLG 4-
21&22 Working capital Lecture and Laptop and Projector ➢ Corporate Finance by Stephen A. Ross, Randolph L1,L2,L3
management, key class room Westerfeild, Jeffrey Jafe, Tata McGraw Hill
components, discussion ➢ Financial Management by Prasanna Chandra, Tata Mc Graw
estimation of Hill
operating cycle
GLG 4-
23&24 Working Capital Lecture and Laptop and Projector ➢ Handouts on Working Capital to be provided by Faculty L1,L2,L3
Management- Fund class room
Based and Non Fund discussion
Based Limits
➢ Corporate Finance by Stephen A. Ross, Randolph GLG 4-
25 Sources of raising Lecture and Laptop and Projector Westerfeild, Jeffrey Jafe, Tata McGraw Hill L1,L2,L3
long term & short class room ➢ Financial Management by Prasanna Chandra, Tata Mc Graw
term funds discussion Hill

26&27 Mechanics of Raising Lecture and ➢ Corporate Finance by Stephen A. Ross, Randolph GLG 4-
capital through debt class room Laptop and Projector Westerfeild, Jeffrey Jafe, Tata McGraw Hill L1,L2,L3
and equity discussion ➢ Financial Management by Prasanna Chandra, Tata Mc Graw
Hill

GLG 4-
28 Debt Financing Lecture and Laptops and OHP ➢ Corporate Finance by Stephen A. Ross, Randolph L1,L2,L3
class room Westerfeild, Jeffrey Jafe, Tata McGraw Hill
discussion ➢ Financial Management by Prasanna Chandra, Tata Mc Graw
Hill

4
 ➢ Corporate Finance by Stephen A. Ross, Randolph GLG 4-
29&30 Financial distress, Lecture and Laptops and OHP Westerfeild, Jeffrey Jafe, Tata McGraw Hill L1,L2,L3
managerial incentives class room ➢ Financial Management by Prasanna Chandra, Tata Mc Graw
and information discussion Hill

ASSESSMENT PLAN - Internal

# Modules Type of Assessment Weightage Learning objective
1 Fundamentals of assignment 10% GLG-5
corporate finance
2 Risk and return, Quiz 10%
valuation of bonds and GLG -5
shares
3 Cost of capital case 10% GLG -5
4 Capital structure, Assignment 10% GLG-4
financing and dividend
patterns

Standard Assessments

1 Mid Term Exam 20% GLG -4&5

2 End Term Exam 40% GLG -4&5
Total 100%

Reference Materials:

5
• Core Text
• Principles of Corporate Finance by Megginson, Smart and Gitman, Cengage learning.
• Corporate finance by Stephen A. Ross, Randolph Westerfeild, Jeffrey Jafe, Tata McGraw Hill
•

• Reference/ Reading
➢ Financial management by Jonathan Berk, Peter De Marzo and Ashok Thampy, Pearson
➢ Financial Management by Prasanna Chandra, Tata Mc Graw Hill