FORE School of Management, New Delhi

Course Outline
Programme: PGDM (FMG-26/IMG-11)

Name of the Course: Corporate Finance Credit: One

Term-3 Academic Year: 2017-2018
Faculty: Prof Vinay Dutta/ Prof Piyush Pandey Office Contact No.: 46485-515/503
Email: vinay@fsm.ac.in/ piyush@fsm.ac.in
Introduction:
Finance is the life line of every business. Every decision that a business takes has some financial
implications and any decision which impacts the financial position of a business comes under the
purview of Corporate Finance. Corporate finance also deals with the financial tools and analysis
used to make these decisions. The important pillars of Corporate Finance are:
 Investment decision
 Financing Decision
 Working capital Management
 International Finance

Course Objective:
 To understand the central ideals and theories of modern finance.
 To provide a framework for analyzing investment, financing, dividend and working capital
decisions, in the real world situations.
 To develop an in-depth knowledge and understanding of the tools and techniques that would
enable effective decision making with regard to a firm’s capital structure and capital budgeting
policies.
 To get basic understanding of international finance in terms of exchange of currency.Text

Book :
Financial Management by Prasanna Chandra, 9th ed. Tata McGraw Hill
Reference Books:
1. Brigham, Eugene F & Ehrhardt, Michael C; Financial Management,2013, 12th edition, Cengage
Learning
2. Damodaran, A. Corporate Finance, John Wiley & Sons Inc. Latest Edition

Pedagogy
The teaching pedagogy would consist of class discussions, Case studies, quiz,class presentations
by student groups, assignments and project work.
Evaluation components and weightage:
Quiz : 10
Assignment : 10
Mid Term : 20
Group Presentation : 20
End Term : 40
________
Total 100 Marks
Session Session Theme Readings Learning Outcome
No. from Text
Book/
Additional
1 Overview of Corporate Finance: Forms of Chapter 1 1. Basics of business
business and business ownership, Scope, Case Study 2. (Un)/ limited liability
objectives and function of financial LSI Logic 3. Formation of company
management
2 Financial goals: profit maximization vs Chapter 1 1. Profit vs wealth maximization
wealth maximization, EVA, Agency 2. Market capitalization
Problem 3. Measures of wealth Creation

3-4 Time Value of Money Chapter 6 1. Money value with time dimension
2. Decision making using time as a
component
5 Sources of Long Term finance- Features Chapter 17 1. Raising money for business
2. Merits/ demerits of each type
6-7 Cost of debt, Cost of Preference equity, Chapter 7, 1. Cost of each type of finance
Cost of Equity, Dividend Growth Model, 9 2. Time value applied to funding
CAPM 3. Investor viewpoint of cost
8 Cost of Capital- WACC, Marginal Cost of Chapter 14 1. Overall cost of funding
Capital 2. Target rate of profitability
9 Techniques of Capital budgeting Chapter 11 1. Investment decision
Mini Case 2. Objectivity of capex
Aman Ltd
10 Capital budgeting under Risk and Chapter 13 1. Coping with uncertainty of future
Uncertainty 2. Adjustments for gaps in expected vs
real situations in business
Mid Term Test
11 Operating & Financial Leverage Chapter 20 1. Profit vs profitability
2. Improving profits through financial
strategy
12 Working capital management Chapter 23 1. Short term finance considerations
2. Features of current assets
3. Current asset financing strategies
13 Inventory and Receivables management Chapter 26 1. Managing with optimal inventory
& 25 2. Costs in receivables
Mini Case 3. Improving profit with cost reduction
Multitech
Ltd
14 Cash management & Working capital Chapter 24 1. Cash management models
assessment & Bank Finance & 27 2. Optimal level of current assets
3. Bank finance for current assets
15 Capital Structure Chapter 19 Optimal debt- equity mix
16 Dividend Decisions Chapter 21 1. Dividend vs retained earnings
2. Role of dividend in firm valuation
17 Foreign exchange market and rates Chapter 37 Forex rates
Role of banks in forex market
18 Group Presentations
19 Group Presentations
20 Group Presentations

Evaluation Component Break-up Details

% breakup
Group Presentations
(Group Project)
Quiz
Assignment
Mid Term Examination
End Term Examination
Evaluation Details
20% Group presentations to incorporate
1. Application of concepts
2. Innovations in business
3. A summary of research and news in media
Each student to have complete knowledge of the
components of presentations.
10% 1 quiz of 10 marks
10% Each student will apply the concepts learnt in
class on real life data of an assigned company and
submit a comprehensive report on Sources of
finance, cost of capital, working capital
management practices
20 %
40 %