MZR+SAI

CORPORATE FINANCE

Course Code : FIN 401 Credits : 03

CIE Marks : 50
Exam Hours : 03 SEE Marks : 50

Course Learning Outcomes: At the end of the course, the student will be able to-
CLO1 Understand the role of the corporate financial manager, key aspects of the corporate
environment, and the implications of theory for practical financial management.
CLO2 Develop analytical skills for making the corporate investment with regards to
financial decisions and risk analysis.
CLO3 Compare various models of investment decision making and apply appropriate
methods to conduct an analysis of practical financial problems.
CLO4 Evaluate financial performance and other investment opportunities of a corporation
using various financial analyses.

Mapping of Course Outcomes to Program Outcomes-

PLO1 PLO2 PLO3 PLO4

Basic Analytical Communication Practical Implementation in
Knowledge Skill Skill the Context of Bangladesh
CLO1 3
CLO2 2 3 3
CLO3 2 3 2 3
CLO4 2 3 2 3

3-Strong Correlation 2- Medium Correlation 1- Low Correlation

Sl NO COURSE CONTENT (as Summary) Hrs CLOs
01 Introduction to Corporate Finance: Corporate Finance and the 9 CLO1
Financial Manager, Forms of Business Organization, The Goal of CLO2
Financial Management, The Agency Problem and Control of the CLO3
Corporation, Financial Markets and the Corporation. CLO4
Financial Statements, Taxes, and Cash Flow: The Balance Sheet,
The Income Statement, Taxes and Cash Flow.
Working with Financial Statements: Cash Flow and Financial
Statements, Standardized Financial Statements, Ratio Analysis, The
Du Pont Identity, Evaluation of firm using Financial Statement
Information.
02 The Time Value of Money: Concepts of TVM, Future Value and 9 CLO1
Compounding, Present Value and Discounting, Determining the CLO2
Discount Rate, Finding the Number of Periods, Future and Present CLO3
Values of Multiple Cash Flows, Valuing Level Cash Flows:

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Annuities and Perpetuities. Comparing Rates: The Effect of

Compounding, Loan Types and Loan Amortization.
Cost of Capital: Some Preliminaries, The Cost of Equity, The
Costs of Debt and Preferred Stock, The Weighted Average Cost of
Capital.
03 Interest Rates and Bond Valuation: Bonds and Bond Valuation: 9 CLO2
Bond Features and Prices, Bond Values and Yields, Interest Rate CLO3
Risk, Finding the Yield to Maturity, Finding the Bond Duration,
Bond Features, Some Different Types of Bonds.
Stock Valuation: Common Stock Valuation, Some Features of
Common and Preferred Stocks, The Stock Markets: Broker vs.
Dealer, OTC vs. Organized Market.
04 Capital Budgeting: Importance of Capital Budgeting, Appraisal of 9 CLO2
Investment Opportunities using The Payback Rule, The Discounted CLO3
Payback, The Average Accounting Return, Net Present Value, The CLO4
Internal Rate of Return, The Profitability Index, The Practice of
Capital Budgeting.
Risk and Return: Returns, Expected Returns and Variances, Risk:
Systematic and Unsystematic, Diversification and Portfolio Risk,
Systematic Risk and Beta, The Security Market Line.
05 Leverage and Capital Structure Policy: Leverage, Break-Even 9 CLO2
Analysis, Estimation of Degree of Operating Leverage, Degree of CLO3
Financial Leverage, and Degree of Combined Leverage; Effect of
Leverage, Capital Structure and the Cost of Equity Capital, M&M
Propositions I and II with Corporate Taxes, Optimal Capital
Structure.
Dividends and Dividend Policy: Factors Influencing Dividend
Policy, Types of Dividend Policy, Standard Method of Cash
Dividend Payment, Establishing a Dividend Policy, Stock
Repurchase: An Alternative to Cash Dividends, Stock Dividends
and Stock Splits.

Text Books
Ross, S. A., Westerfield, R. W. and Jordan, B. D. (2008) Corporate Finance Fundamentals, 8th edition,
McGraw -Hill, 2008.
Reference Books
1. Allen, F., R. A. Brealey, and S. C. Myers, Principles of Corporate Finance, 12th edition McGraw Hill,
2017.
2. EUGENE F. BRIGHAM & JOEL F. HOUSTON Fundamentals of Financial Management (8th
edition) Publisher (THOMSON, SOUTH WESTERN).
3. Fundamentals of Financial Management (12th edition and above) by, JAMES C. VAN HORNE &
JOHN M WACHOWICZ, JR. Publisher (FT, Prentice Hall, Financial Times).

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ASSESSMENT PATTERN
CIE- Continuous Internal Evaluation (50 Marks)

Bloom’s Category Tests Assignments Quizzes External Participation in

Marks (out of 50) (25) (10) (05) Curricular/Co-Curricular
Activities (10)
Remember 05
Understand 05 05
Apply 10
Analyze 10
Evaluate 10 05
Create

SEE- Semester End Examination (50 Marks)

Bloom’s Category Test

Remember 5
Understand 10
Apply 5
Analyze 20
Evaluate 10
Create -

PLO1 To gather basic knowledge in all the functional areas of business with modern
approaches.
PLO2 To develop business analytical skills needed to take practical crucial business
decisions.
PLO3 To develop the basic communication skills required in competitive business settings.
PLO4 To develop an inclination to innovate appropriate indigenous systems and practice of
management effectiveness in the socio-economic and cultural context of a
developing country, particularly Bangladesh.