Cellphones are to be fully switched off in the class.

Laptops are to be used only when required.

Course Outline

Introduction to Corporate Finance: Specifics of the corporate form of business organization – sole proprietorship, partnership, corporations; Role of a finance manager; Capital structure; Financial Planning and Growth; Basic financial statement interpretations and cash flows. Cost of Money - Interest Rates and its determinants; Term Structure of Interest Rates. (5 Sessions)

Value and Capital Budgeting: Time value of money; Different techniques used for capital budgeting decisions - NPV, IRR, Pay-back period, DCF; NPV at one period case, multi-period case and compounding period; Valuation of cash flow based on perpetuities and annuities (8 Sessions)

Financing: Pattern and sources of financing; Long term financing – common and preferred stocks; Stock, types of stocks and their valuation; corporate long term debt covering bonds; Basics of bonds and bond valuations; Issuing securities to public – IPO’s; Convertible Bonds, Rights, Bonus Issues, Warrants and Options (9 Sessions)

Structure and Cost of Capital: Modigliani and Miller model; A comparison of Adjusted – Present Value (APV), Flow – to – Equity approach (FTE), Weighted average cost of capital (WACC) approach; Influence of taxation – Income Tax Shield; Value of levered firm; Pecking order hypothesis. (8 Sessions)