COURSE

CORPORATE FINANCE CREDITS 3

TITLE
COURSE
MGT 3102 COURSE CATEGORY CORE L-T-P 2-0-1
CODE
LEAR
NING
VERSION 1.0 APPROVAL DETAILS ACM BTL-5
LEVE
L
ASSESSMENT SCHEME
Semester
During Semester Assessment (DSA) End
Examination
Practical DSA Components Attendance SEE
20% 25% 5% 50%
Corporate finance is a specific area of finance dealing with the financial decisions. Finance is
about money and market, but it is also people. The secret of success in financial management
is to increase value. The subject creates the awareness of the role, purpose, and centrality of
the finance function in effective corporate governance. This subject focuses on fundamental
Course financial management from the perspective of inside the corporation or operating entity. It
Description builds upon the concepts from the core finance subjects, where topics covered objective of
finance, profit v/s wealth maximization, time value of money, financial markets & institutions,
measuring risk and return, cost of capital, capital budgeting decision, optimal capital structure,
long-term and short-term sources of fund, working capital management decision and capital
market.
1. To introduce concepts and objectives of corporate finance.
2. To understand concept of time of value in financial decisions.
Course 3. To explore the sources of long-term finance & design financial strategies and to evaluate
Objectives different techniques of investment decisions.
4. To understand relationship between capital structure and the value of the firm.
5. To estimate working capital requirements.
Upon completion of this course, the students will be able to
1. Explain the role and business objectives of the finance manager
2. Compute present & future value and use of discounting & compounding techniques with
the help of problems & cases.
Course 3. Identify and explain the main long-term sources of debt, equity, preference finance
Outcome available to any size of business. Explain the differences between various sources of
capital, and the advantages and disadvantages of each source of funds. Explain the
principles, benefits and limitations of the different methods of investment appraisal - Net
present value (NPV), the internal rate of return (IRR), accounting rate of return, payback
period, Profitability Index and Discounted PBP and be able to perform calculations in order
 to assess investment through problems & cases.
4. Describe and calculate the cost of debt capital, preference share capital & equity share
capital. Calculate the weighted average cost of capital and discuss its usefulness and
explain the practical consideration in determining the capital structure of the company.
5. Explain the factors influencing dividend decision. Calculate the estimation of working
capital through problems and case studies. Explain the concepts of receivables, inventory
& cash management.
6. Apply the concepts of different financial decisions - Capital Budgeting decision, Capital
structure decision, Working capital decision and dividend decision by preparing a report
for the company undertaken
Prerequisites: MGT 3102 – Corporate Finance
CO, PO AND PSO MAPPING
PO-
CO PO -1 PO-2 PO-3 PO-4 PO-5 PO-6 PO-7 PSO-1 PSO-2 PSO-3
8
CO-1 2 - - - - - - - - - -
CO-2 - 3 - 2 - - - - - - -
CO-3 - - - 2 - 3 - - - - -
CO-4 - - - 3 - 3 - - - - -
CO-5 - - - - - 3 - - - - -
CO-6 - - - 3 - 3 - - - - -
1: Weakly related, 2: Moderately related and 3: Strongly related
MODULE 1: OVERVIEW OF CORPORATE FINANCE (2 hours)
Scope of finance, Objective of corporation, Finance function. Financial Manager’s role, Agency CO-1
Problem, Financial goal: Profit Maximization vs. Wealth Maximization (Theory)
MODULE 2: TIME VALUE OF MONEY (5 hours)
Timelines, Future value – Single & Annuity, Present value – Single & Annuity, Simple &
CO-2
Compound interest, Payment perpetuities, Growing Annuities, Semi-annual & other
compounding period, Amortized loans * Problems
MODULE 3: LONG-TERM SOURCES OF FINANCING (2 hours)
Equity / Ordinary Shares – Issue Procedures, Term Loans, Debentures / Bonds and
CO-3
Securitization, Hybrid Financing Instruments. Lease Financing and Hire Purchasing, Venture
capital Financing – Theoretical Framework & Venture Capital Scenario in India
MODULE 4: COST OF CAPITAL (5 hours)
Concept of opportunity cost of capital, Methods of calculating cost of capital – Cost of debt,
CO-4 & CO-6
Preference & Equity capital, CAPM model, Determination of Weighted Average Cost of Capital
(WACC). * Problems
MODULE 5: INVESTMENT DECISIONS – CAPITAL BUDGETING (5 hours)
Nature of Investment Decision, Types of Investment decision, Investment Evaluation CO-3 & CO-6
Techniques NPV, IRR, MIRR, PI, PBP, ARR, and Compare & Contrast NPV & IRR. * Problems
MODULE 6: CAPITAL STRUCTURE (4 hours)
Introduction, Planning the Capital Structure, Profitability Aspect, Liquidity, Control, Leverage CO-4 & CO-6
Ratios of other firms in the Industry, Financial & Operating and Combined Leverage
MODULE 7: DIVIDEND POLICY (2 hours)
Factors affecting dividend policy, Bonus Shares & Stock Splits, Stock Repurchase, Share Splits in CO-5 & CO-6
India, Issues of Bonus shares in India
MODULE 8: WORKING CAPITAL MANAGEMENT (5 hours)
Nature of working capital Planning, Factors affecting Working Capital, Management of Working
Capital in India, Estimation of working capital investment. * Problems
Receivables management – Objectives, Credit Policies, Credit Terms, Collection Policies & CO-5 & CO-6
factoring.
Inventory Management – Nature, Need & Objectives
Cash Management - Motives, Objectives of holding cash, Factors determining cash needs.
TEXT BOOKS
1. Financial Management, I. M. Pandey, Latest Edition Vikas Publishing House Pvt. Ltd
REFERENCE BOOKS
1. Financial Management –Theory and Practice [6/E] – Prasanna Chandra – TMH
2. Principles of Corporate Finance [7/E] – Brealey Myers - Tata McGraw-Hill
E BOOKS
Essentials of Corporate Finance, 5e, Stephen A. Ross, Rowan Trayler, Gerhard Hambusch,
1. Charles Koh, Randolph W. Westerfield, Bradford D. Jordan – McGraw Hill

MOOC
1. www.coursera.org/learn/corporate-finance-essentials

2. www.coursera.org/learn/corporate-finance-measure-success
3. www.coursera.org/learn/corporate-finance-two

Practical (Project Work) (L-T-P: 2-0-1)

Details of Project work No. of Hours

Study about the company assigned to you and its annual report and 4 Hours
also by going through the capital line database

Learn the different financial decisions applied- Capital Budgeting 6 Hours

decision, Capital structure decision, Working capital decision and
dividend decision

Collect the required data for analysis 6 Hours

 Analysis of data and interpretation of results 8 Hours

Evaluation of the project (presentation) 6 Hours

Workflow & Evaluation:

Category Instructions Time frame Evaluation

Project Work

Softcopy of Report to be sent to the Course

Instructor through MS teams on
Interim
10 Hours 10 Marks
Report - Conceptual Framework
Methodology & Data Collection

Softcopy of Report to be sent to the Course

Instructor through MS teams on
Final Report Final Consolidated Report including
20 Hours 10 Marks
& Viva Voce
- Data Analysis & Interpretation
Viva Voce will be conducted online

Total 30 Hours 20 Marks

ASSESSMENT RUBRICS

Post Graduate Programs – MBA

Project rubric
Excellent Average Below average
Interim reporting (10 marks)
(An individual report is to be submitted followed by an individual presentation)
Excellent: 7-10; Average 3-6; Below Average 0-2
Lessons • The individual had a • The individual had a • The individual had a
Learned level of engagement level of engagement level of engagement
that demonstrated a that demonstrated to that did not
strong commitment to some extent a demonstrate a
the project and learning commitment to the commitment to the
outcome. project and learning project or the learning
• The opinion of the outcomes. outcomes.
individual is evident. • The level of analysis • Conclusions simply
and reflection could involved restating
have been deeper. information without
 reflective thought.
Final reporting (10 marks)
(A final group report is to be submitted followed by a group presentation)
Excellent: 5; Average 3-4; Below Average 0-2
Content (5 • The report contained an • The report contained • hard to understand the
marks) abundance of material material to support the underlying logical and
which clearly related to main arguments, but: flow of ideas.
the main topic. • not all material clearly • Major aspects of the
• External research was related to the main analysis or
used to justify topic recommendations were
arguments or solutions. • the report was absent.
• The report was original appropriate and • No external research
meeting the valuators was used to justify
expectations arguments or solutions.
Speaking • Team members had • Team members were • Team members were
Skills and clear articulation. mostly audible and/or often inaudible and/or
Participatio • Every team member fluent on the topic, but: hesitant and relied
n (5 marks) spoke and participated • not all team members heavily on notes.
at a very high and spoke and/or • A high level of
balanced level. participated in a high discomfort with public
• Speakers demonstrated and balanced level; speaking was exuded.
enthusiasm and • speakers demonstrated • did not hold audience
confidence fair level of attention.
• presented in a creative enthusiasm; light • The presentation went
way that held audience discomfort with public over the time allotted.
attention. speaking and/or
• The presentation fit • presentation only
into the time allotted. somewhat held
audience attention.