L T P/S SW TOTAL

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UNITS
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Course Title: Advanced Corporate Finance

Course Code: FIBA 301
Credit Units: 3
Course Level: UG

Course Objectives:
The basic objective of the course is to:
• Make the students aware of the objectives of a firm and various agency problems issues arising in a firm
• Determine the capital structure and rewarding the shareholders is the basic objective of the course
• Equip students aware of various valuation models used by corporates to value a stock and firm
• Enlighten students with knowledge on tools and defensive strategies used in corporate restructuring

Pre-requisites: Students of finance should be aware of the latest developments in the field of corporate finance. This course will be a step above
Financial Management II where they will learn advanced topics related to corporate restructuring & corporate governance.

Course Learning Outcomes

After successful completion of the course, students will be able to:
 • Identify the various agency problems and conflicts in compensation in an organization.
• Understand various capital structure theories and effect of dividend on a stock price.
• Interpret the various valuation concepts.
• Analyze the concept of Corporate Restructuring and its defensive strategies.
• Evaluate the importance of Corporate Governance and ethical practices in implemented in business.

Course Contents/Syllabus:
Weightage (%)
Module I: Introduction 20
Objectives of Corporate finance. Profit and wealth maximization, Agency Problems, Management Compensation &
Measurement.

Module II: Capital Structure Theories and Dividend Decisions 20

Factors affecting Capital Structure decisions, Theory of Capital Structure Decisions, MM Theory, NI, NOI and
traditional theory, Pecking order theory. Importance of dividend decisions, Theories of Dividend Decisions:
Irrelevance theory, optimal dividend decision, relevance theory, Issues in dividend policy:
Bonus Shares, Stock Splits & Buyback of shares.
Module III: Valuation Concepts 20
Concept: Valuation and Principles; Application of valuation models; Valuation Model:
Economic value Added (EVA) and Market value Added (MVA); Concept: Balance Score
Card; Other Methods and measures of financial performance; Concept of Adjusted Present Value.

Module IV: Corporate Restructuring 20

Differential Efficiency & Financial Synergy: Theory of Mergers, Operating Synergy & Pure Diversification: Theory of
mergers, Costs and Benefits of Merger, Evaluation of Merger as a Capital Budgeting Decision, Poison Pills, Turnaround
Strategies, Concept of debt restructuring.
Module V: Recent Trends in Corporate Finance and Business Ethics 20
Applications of Information Technology in Corporate Finance, Zero Based Budgeting Artificial Intelligence, Rolling
Forecasts, Corporate Governance, Ethical practices in marketplace, corporate responsibility, social audit & ethical
investing.
 Pedagogy for Course Delivery:

As the basic objective of the course is to equip the students with the understanding of advanced topics of finance. Case studies will be taken up to
illustrate real life situations. We will open the stage for two-way communication and discussion.

List of Professional Skill Development Activities (PSDA):

PSDA 1: Do online study and discuss various management compensation schemes and dividend policies.
PSDA 2: Design a capital structure for any start-up company.
PSDA 3: Prepare a report on CSR practices followed by companies of FMCG/pharmaceutical/automobile industry.

Lab/ Practicals details, if applicable:

List of Experiments:

• Not Applicable

Assessment/ Examination Scheme:

Theory L/T (%) End Term Examination (%)

40% 60%

Continuous Assessment/Internal Assessment End Term

(40 %) Examination
(60%)
Components (Drop down) Class Test Project Case Attendance
(CT) Discussion

Linkage of PSDA with Internal Assessment Component if - PSDA 2 & PSDA 1 - -

any 3
Weightage (%) 5 20 10 5 60
 MAPPING CONTINUOUS EVALUATION COMPONENTS/PSDA WITH CLOS
Bloom’s Level > Identify Understand Apply Analyze Evaluate
Course Learning
Outcomes CLO1 CLO2 CLO3 CLO4 CLO5
Assessment type/PSDA
Class Test (CT)
Project (PSDA 1 & 2)
Assignment ✓ ✓ ✓
PSDA 1 ✓ ✓

Text & References:

Text:
• Brealey and Myers (2018), Principles of Corporate Finance, Eighth Edition, Tata McGraw Hill Publishing Company Limited.

References:

• Damodaran Aswath, Corporate Finance, Second Edition, John Wiley and Sons.
• Quiry, P., Dallocohio, M., YannL E Fur, Antonio Salvi, Corporate Finance: Theory and Practice, Seventh Edition, John Wiley,
and Sons.
• Ross, Westerfield and Jaffe, Corporate Finance, Seventeenth Edition, Tata McGraw Hill.