CORPORATE FINANCE – I

Module I: Corporate Finance -Introduction

Corporate Finance introduction – Financial management decisions-Forms of business organization-
Goals of financial management-Agency problems - Role of financial manager.

Module II: Financial Analysis and Planning

Financial Statements: Balance Sheet, Income Statement, Statement of Cashflows; Financial Statement
Analysis: Liquidity ratios, Asset Management ratios, Debt management ratios, Profitability ratios, Market
value ratios –Trend Analysis-The DuPont Analysis.

Module III: Risk and Return: Measuring Returns

Basis for time value of money – Future value and compounding- Present value and discounting- Future
and present value of multiple cash flows-Valuing level cash flows: Annuities and Growing Annuity-
Perpetuities and Growing perpetuity - Effect of compounding-Effective annual rates and Annual
percentage rates- Continuous compounding- Amortization of Loans- Arithmetic averages and compound
annual returns.

Module IV: Risk and Return: Mean Variance Analysis

Measuring Risk - Portfolio risk – Unsystematic Versus Systematic Risk- Beta Estimation –– Markowitz
theory – Relationship between the risk and the rates of return: The Capital Asset Pricing Model -
Arbitrage Pricing Theory.

Module V: Financial Markets, Institutions and Instruments

Financial institutions –Money market- Capital market: Primary market, Secondary market - Public issue
- Right Issue - Private placement Financial Intermediaries – Regulatory financial infrastructure
- Securities and Exchange Board of India (SEBI) – Money market instruments – Mutual Funds- Bond
and Equity Valuation.

Text Book:
• Corporate Finance, Stephen Ross, Randolph W. Westerfield and Jeffrey Jaffe. Tata McGraw-
Hill, 9th edition.

Reference Books:
• Fundamentals of Corporate Finance, Jonathan Berk, Peter Demarzo and Jarrad Harford,
Pearson Publications, ISBN 978-93-530-6998-8.
• Principles of Corporate Finance, Richard A. Brealey, Stewart C. Myers, Franklin Allen & Pitabas
Mohanty: 8th Edition (SIE)
• Financial Management: Theory and Practice, Prasanna Chandra, Tata McGraw-Hill, 8th edition.