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· Be able to : apply time value of money concepts to complex cash flow scenarios
· Be able to :Apply time value of money concepts to value basic securities like bonds and stocks .
· Be able to understand risk return trade off and use the Capital Asset Pricing Model to quantify the risk-return tradeoff
· Be able to evaluate alternative techniques for analyzing project opportunities and budgeting capital
· Be able to determine a firm’s weighted average cost of capital
· Be able to apply the net present value criterion to complex capital budgeting problems using different approaches.

a) Text :

Fundamentals of Corporate Finance by Stephen A Ross, R W Westerfield and B. D Jordan –8th Edition, ( Subcontinent edition) published by Tata Mcgraw Hill

- Financial Management: Theory and Practice –11th Edition by Brigham and Ehrhardt, Thomson India edition

- Principles of Corporate Finance - 8th Edition, by Brealey, Myers, Allen and Mohanty, Special Indian Edition, Tata Mcgraw Hill,

d) Calculator : You will typically need a calculator that can handle exponents (i.e., that has a “yx”-type key).

4.) Tentative Session Plan:

Session	Topics Covered
1,2,3	Building blocks : · Introduction, · Time Value of money
4,5,6	Application of time value of money concepts to value debt securities like bondsand stocks · Bond Pricing · Bond Features · Valuation of Stocks
7-10	Risk, Return and Capital Markets · Concepts of risk and return in isolation · Concept of risk and return in a portfolio context · CAPM · Market Efficiency
11,12,13,14	Building Blocks of capital budgeting : · Introduction, · Competing Criteria for making a capital budgeting decision
15,16	Cost of Capital · Determination of Component Costs · Determination of WACC · Issues in using WACC.
16-17	Cash Flow determination in Capital Budgeting · Deriving the Cash Flows from accounting numbers
17-18	Various Approaches typically used for making a capital budgeting decision l · FCF approach · CCF approach · APV approach and · CFTE approach.
19	Other issues in capital Budgeting · Capital budgeting under uncertainty and risk analysis, (Sensitivity analysis, scenario analysis, breakeven analysis, Certainty equivalent approach etc. · Taking a capital budgeting decision for projects with unequal lives
20	· Recapitulation of the discussion during the course.

5. Evaluation components : The evaluation process is divided into three components.

i)Quiz and /or project assignment: 15-30% :You will be typically told in advance when a regular quiz will be given. The faculty also reserves the right to give any number of unannounced “pop” quizzes during the semester. The number of pop quizzes will be negatively related to the class’s level of preparation and participation.

An important note about grading:

You will be generally graded relative to your peers and the grade distribution is expected to be approximating a normal distribution. This is designed to help you. However the faculty has the right to pre specify a certain cut off score in the course failing which may invite and F grade in the course.

i) Students involved in academic dishonesty will receive a ZERO grade on the particular component in which the violation occurred. Academic dishonesty consists of misrepresentation by deception or by other fraudulent means such as copying or use of unauthorized aids in tests, talking during in-class examinations; aiding another student’s dishonesty; and giving false information for the purpose of gaining credits.

ii) COMPUTERS and MOBILES IN THE CLASSROOM: …are NOT allowed. No electronic devices that allow your access to the internet are allowed in the classroom.

Created By: Alora Kar on 11/23/2015 at 03:33 PM
Category: MBA-I T-III Doctype: Document