AMERICAN INTERNATIONAL UNIVERSITY-BANGLADESH

Faculty of Business Administration

Department of Accounting and Finance
BBA PROGRAM
COURSE OUTLINE

Term: Fall 2016-2017

I. Course Code and Title: FIN-4001 CORPORATE FINANCE
II. Credit Hours: 3 (Three)

III. Course Description:

This course aims to provide the students with the fundamental concepts, principles and approaches of corporate
finance, enable the students to apply relevant principles and approaches in solving problems of corporate
finance and help the students improve their overall capacities.

IV: Course Objectives:

The aim of this unit is to assist students to develop conceptual, analytical and decision making skills for the
formulation and implementation of financial policies and strategies for the management of a corporation. This
course introduces how companies make financial decisions. After studying the course the students will be able to
take decisions in the following major areas:

1. The Investment Decision: How should one select the best invest opportunity?
2. The Financing Decision: How should the cash required for the investment be raised?
3. The Dividend Decision: How much dividend should be paid and in what form?

The course requires that you know basics of the time value of money, accounting and business statistics and are
familiar with spreadsheet application, e.g. MS Excel.

V. Topics to be covered*:

Topic Specific Objectives Time

Suggested Teaching
Frame
Activities Strategy(s)
(Weeks)
Introduction to Corporate AIUB Mission and Vision Group Lecture,
Finance Course Orientation 1 Week Discussion Power point
Introduction to Corporate Finance & Solving slides and
Corporate Finance, Types of (Two Corporate discussion
Business Organization, Goal of Lectures) Finance on chapter 1.
Financial Manager and Agency Introductory
Problem & Control. Questions.
Overview of Business Understanding Discounted Cash Group Lecture,
Mathematics and Financial Flow Valuation 1 Week Discussion, workshop on
Statements Reading MS Excel,
Understanding Financial (Two Chapters 3 solving CF
Statement Analysis Lectures) & 4, solving BBA Case #
chapter end 1, 2 & 3
problems.

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 NPV and other Investment Understanding Capital Budgeting 1.5 Weeks Group Solving CF
Criteria Techniques Discussion, BBA Case #
(Three Reading 4, 5, 6 &7
Understanding Risk in Capital Lectures) Chapters 5 Class
budgeting & 7, solving performance
Sensitivity Analysis, Scenario chapter end test,
Analysis & BEP Analysis. problems. Practical
Demo etc.
Estimation of Operating OCF Calculations 1.5 Weeks Group
Cash Flows Discussion, Assignment
Calculating Weighted Average (Three Reading &
Risk, Cost of Capital & cost of Capital (WACC) Lectures) Chapter 13, Presentation,
Capital Budgeting Calculation of Cost of Equity, solving
Estimation of Beta, CAPM, chapter end BBA CF
DDM, Cost of Debt and Cost of problems. Case # 8
Preferred Stock
Week 6: Mid-Term Exam
Capital Structure: Basic Capital structure & Valuation: Group
Concepts Borrowing and Value of the Firm 2 Weeks Discussion, Solving CF
Capital Structure & MM Reading BBA Case #
Propositions (with or without (Four Chapter 16, 9
Tax) Lectures) solving
chapter end
problems.
Capital Structure: Limits to Optimal Capital Structure 1 Week
Group
the use of Debt Determination: Chapter end
Discussion,
Cost of Financial Distress, (Two problems
Reading
growth and the D/E Ratio, Lectures) solution.
Chapter 17.
Optimum Capital Structure.
Dividends and Other Distribution decision: 1 Week Analysis of
Payouts The Dividend Payments Group the Dividend
Payout Decision (Two Discussion, policies of
Dividend Irrelevance Lectures) Reading Public
Dividend Payout and Firm Chapter 19, Limited
Valuation solving Companies
chapter end listed in
problems. DSE.
Solving CF
BBA Case #
10
Mergers, Acquisition and Mergers and Acquisitions: 1 Week Solving CF
Divestitures Group BBA Case #
Corporate Control (Two presentation 11,
Motives for Merger Lectures) on Assignment
Evaluating Mergers Assignment and class
Merger Tactics and Viva. tests. Group
assignment
and class
performance
test.
Week 12: Final Exam
* The instructor reserves absolute rights to change or modify this schedule as needed. Please use this
schedule to stay current in your studies.

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VI. Course Requirements:

Class Performances:

Students will be evaluated throughout the semester based on their group performance. T wo class
performances will be taken during the semester. No make up will be taken. Students are strongly recommended
not to miss any class performances.

Assignment:

The topic of the assignment will be informed in the class. The assignments could be individual / group based.
Assignments / Projects must be submitted within stipulated time frame. No late submissions will be entertained.

Class behavior and policy:

Students are expected to attend class and be on time. Students must have 80% attendance of the total number
of classes. It is entirely the responsibility of the students to collect the materials that has been missed due to
failure of attending any classes for any reason whatsoever. Let it be reminded that lectures will not be repeated.
Withdrawal from class is not automatic. The student who desires to withdraw is responsible for processing the
withdrawal. Students are encouraged to actively participate in the class discussion and ask relevant questions.
Students must turn off their cell phones or put on silent mode prior to entering the classroom. Honesty is the best
policy. Any sort of academic dishonesty will result in severe consequences and may lead to receiving a failing
grade for the course.

VII. Evaluation:

Mid Term Final Term

Distribution Marks Distribution Marks
Group Class Performance & Viva 1 25% Group Class Performance & Viva 2 25%
Group Assignment and Viva 1 25% Group Assignment and Viva 2 25%
Midterm Exam 50% Final Exam 50%
Total 100% Total 100%
Final Grade = 40% ( Mid Term) + 60% ( Final Term)=100%

VIII. Textbook/References:
1. Corporate Finance, Ninth Edition, International Edition 2010, Stephen A. Ross, Randolph W.
Westerfield, Jeffrey Jaffe, McGraw–Hill International Edition
2. Corporate Finance – Theory and Practice, 2nd Edition by Aswath Damodaran, McGraw–Hill
Other references
1. Fundamentals of Corporate Finance, 5th Edition, 2004, Brealey, Richard A., Myers, Stewart C, and Marcus,
Alan J. McGraw-Hill Irwin

2. R.A Brealy and S.C Myers, Principles of Corporate Finance, 6th Edition, Irwin McGraw-Hill, 2000

3. Foundations of Financial Management, First Edition, 2014, Sarwar U. Ahmed and Dr. Kamrul Hasan, Boier
Desh Publications.

4. Williamson, Oliver, 2002, The Theory of the Firm as Governance Structure: From Choice to Contract,
Journal of Economic Perspectives 16, 171-195.

5. Myers, Stewart, 2003, The Financing of Corporations, Handbook of the Economics of Finance, Volume 1A,
Eds. George M. Constantinides, Milton Harris, and Rene M. Stulz, Elsevier, Amsterdam.

6. Frank, Murray Z., and Vidhan Goyal, 2007, Tradeoff and Pecking Order Theories of Debt, The Handbook of
Empirical Corporate Finance, Ed. Espen Eckbo, Elsevier, Amsterdam.

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7. Graham, John, 2003, Taxes and Corporate Finance: A Review, Review of Financial Studies 16, 1075-1129.

8. Graham, John R., and Campbell Harvey, 2001, The Theory and Practice of Corporate Finance: Evidence
from the Field, Journal of Financial Economics 60, 187–243.

9.Zwiebel, Jeffrey, 1996, Dynamic Capital Under Managerial Entrenchment, American Economic Review 86,
1197-1215.

IX. Faculty Teaching the Course:

M. Taseen Chowdhury
Assistant Professor, Department of Accounting and Finance
Room: Campus 5, 1st Floor, Faculty Room
Phone: 9890804, 9886116, 8815387 Ext. 508
Email: taseen@aiub.edu
Mobile: +8801711680071

Good Luck.

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