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Credits	Three
Faculty Name	Prof Santanu Ganguly
Program	MBA (BM)
Academic Year and Term	2016-17, Term III

Introduction & Objective :

The course alternatively known as corporate finance is all about taking decisions that centre around shareholders’ / stockholders’ value creation and enhancement irrespective of type of venture. So valuation is the foundation or central theme of the course in the backdrop of firms or corporations as going concern. The course introduces time value of money, future and present value of cash flow, then proceeds to risk and return measurement and discusses some fundamental models of risk measurement. The course provides basic input for share and bond valuation, capital budgeting and how capital budgeting decisions sustain and enhance value, how to compute cost of capital, theories and issues of capital structure decision, dividend decision and finally ends with some advanced aspects of financing and valuation decision.

Learning Outcome : At the end of the course the students are expected to –

· Apply time value concept to evaluate project, stock and plain vanilla fixed income securities

· Compute return, CAGR, risk return trade off and quantify risk in portfolio context applying CAPM model

· Compute weighted average cost of capital

· Evaluate capital budgeting project through DCF and other techniques

· Understand Capital structure and dividend decision (basics) in valuation context in the backdrop of different theories.

Contents

Session	Topics	Chapters of the text
1, 2 ,3, 4	Introduction Time Value of Money --Annuity, perpetuity, Loan amortization, DCF -Basic	1,5 and 6
5,6	Interest Rate and Bond Valuation	7
7	Stock Valuation	8
8,9 10	Risk, Return and Capital Market Stand Alone Risk Risk Return of Portfolio CAPM and SML EMH	12 and 13 Chapter 7 and 8 of the reference book.
11, 12, 13	NPV and Investment Project Analysis and Evaluation	9,10 and 11
14 and 15	Cost of Capital	14
16,17	Capital Structure Decision	16
18	Dividend Decision	17
19, 20	Valuing Businesses and Projects   Free cash flow   APV   Cash flow to equity	Chapter 19 of the reference book plus class note
End Term Edition

Evaluation

Evaluation Component

Quiz /Assignment/ project	20
Class Participation	10
Mid term	20
End Term	40

References

Ø Text : Fundamental of Corporate Finance by Ross, Westerfield and Jordon (9th Indian Edition) –

Publisher McGraw Hill

Ø Important Websites : i) www.bseindia.com

ii) www.nseindia.com

iii) www.moneycontrol.com

Ø Reading of Financial dailies is a must to develop conceptual background and awareness as to working of the world of finance.
Ø NOTE: PLEASE CAREFULLY NOTE THE FOLLOWING
ü The course outline is nothing but a broad framework. Certain aspects will be covered with greater details for which the students have to refer to reference books and other materials.
ü Regular class attendance is prerequisite to build up conceptual clarity and understanding as to how the corporate financial policy, financial market and institutions work.
ü Students are expected to display proper conduct and demeanor inside the class lack of which shall result in deduction of class participation marks, expulsion and so on.
ü The course participants must bring scientific calculators in the class. Carrying text book will be a plus.
ü There will be ‘zero tolerance’ for unfair means during examination and plagiarism of any sort.
ü No computers and mobile phone in class please.

Created By: Alora Kar on 01/03/2017 at 09:24 AM
Category: BM-I 2016-18 T-III Doctype: Document