Course No.

CORPORATE FINANCE Credit Hours 3

Com 672
Semester VII Pre- Requisite NONE
Objectives  Apply theory to application, Demonstrating an understanding of the
theoretical knowledge base of organizational behavior
 Analyze how individual and group behaviors act as building blocks to
organizational behavior
 Research and analyze aspects of organizational behavior
 Analyze team behavior and its effect on productivity
 Communicate and interact with team members

CORPORATE FINANCE
1. Introduction to Corporate Finance
Financial decision making in corporations
Types of finances
Financial instruments and markets
Short and long term financing
Valuation principles
Required Rates of Return and risk
Internal & external financing
Spontaneous financing
Short term financing tools.
2. Financial statements and cash flows
The cash flow statement
The income statement and statement of retained earnings
The balance sheet
Relationship between book value and market value
3. Understanding the Interest Rates.
General level of interest rates.
Foreign Borrowing and lending
Purchasing power parity
Structure of interest rate
4. Valuing Debt and Equity
Value debt and preferred stock
Pure-discount instruments
Coupon bonds, zero coupon, perpetual & reserve bonds
Amortized instruments
Preferred stock, their types and valuation.
Valuing equity
A single period common stock
A multi-period common stock
The constant growth dividend & growth in stages.
Implications for managers.
5. Lease and loan financing, Introduction to financing decisions
Description of financial instruments
Private Sources of financing
Commercial banks and other financial intermediaries
Ventures capitalists
Issuing securities to the public.
6. Long-term financial policy: Dividends Policy.
How companies distribute value to the owners
Cash dividends
Share repurchases
Stock dividends and stock splits
When dividend policy is irrelevant
The effect of financial market imperfections
The effect of asymmetric imperfections
Establishing a dividend payout-earnings retention policy.
7. Capital structure theory
Operating & Financial leverage
Cost of Capital,
8. Restructuring
Restructuring company’s assets and claims
Mergers, Acquisitions, divestitures and buy-outs
BOOKS RECOMMENDED (Latest Editions)
Gary W. Emery, Corporate Finance; Principles and Practice
Van Horne, Financial Management and policy.
Gitman, Principles of Managerial Finance.
Brealey and Byers, Corporate Finance, McGraw Hill Rose, Corporate Finance.