Course

Unit 1

Introduction and Overview of Corporate Finance; Time Value of Money, Inflation, Cash flows Effects on accrual accounting, Free cash flow.

Unit 2

Cash flows, Incremental project Cash flows, Net present value, Comparing projects, Project analysis under uncertainty, Scenario analysis, Sensitivity analysis& Spreadsheet Modelling, Discounted cash flow valuation, Sequential valuation Multiples valuation, Market ratios, Pricing, earnings ratios.

Unit 3

Projecting sales growth, Trends in sales growth, Industry Economic analysis, Regressions, Financial statement analysis, Ratio analysis & DuPont Identity, Leverage and Reconcile pro-forma financial statements

Unit 4

Cost of capital, WACC without and with taxes, Perfect Market – WACC, WACC Capital structure, Cost of equity, Business and financial risk, Unlevered beta

Capital structure, Imperfect market, WACC with taxes, WACC with bankruptcy costs, Incorporating changes in leverage, Value of leverage, Lenders and shareholders cost, Agency costs, Managers and shareholders, capital structure

Unit 5

Raising capital, IPOs, Private equity, market Rights, Corporate bond, Mergers and acquisitions, Forms of acquisitions, Synergy and coinsurance effects, Financing acquisitions, Empirical evidence, Payout policy, Types of dividends, Irrelevancy of dividends, Taxes, Stock repurchases& Dividend, Agency cost, Debt holder-shareholder conflicts, Manager-shareholder conflicts and Convertibles, Capital structure.

Course Objective:

To understand and apply financial theories and business models in finance so that optimal financial decisions can be made within companies and organizations.

Course Outcomes:

The students will able to:

CO1: Understanding corporate finance, inflation, and cash flow effects.

CO2: Critically evaluate information from financial models.

CO3: Analyze business problems and identify the ethical aspects, provide a solution and defend it.

CO4: Understand how investment and financing decisions impact the value of a firm

CO5: Evaluate corporate projects and make decisions based on financial data

Textbooks:

• Aswath Damodaran- Investment Valuation: Tools and Techniques for Determining the Value of any Asset – Wiley Finance Series
• Sandeeep Goel- Financial Management Practices in India – Routledge

References:

• Brealey, Stewart, Allen – Principles of Corporate Finance – McGraw Hill
• Pierre Vernimmen and Pascal Quiry, Yann Le Fur- Corporate Finance: Theory and Practice – Wiley