course outline cf 3202 bba 18th

8/10/2019 Course Outline CF 3202 BBA 18th

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DEPARTMENT OF ACCOUNTING & IS

UNIVERSITY OF DHAKA

BBA Program 18thBatch3202: Corporate Finance Semester: June November 2014

Class Days: Sunday & Thursday Faculty: Prof.Md. Maksudur R. Sarker, FCMARoom # Academic BLDG, 1stFloor Tel: 9661900 70 / Ext. 7911

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Course Descriptions:

This course is an introduction to basic concepts of corporate finance and their

application to the valuation, the management of long term investments, the cash flow

analysis, the financial structure and the dividend policy.

The aim of this course 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 corporations

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 corporation take decisions where to invest?

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.

Course Objectives:

Objective of this course is to understand the concepts of Finance from the

perspective of corporations as well as from the market. Course contends include class

lecture, individual assignment, group project, presentation, and selected reading material

to understand the issues of corporate finance and the ways to perform empirical analysis

of the issues. Courses on Financial Management, Business Math, Business Statistics,

Economics and Financial Accounting are the pre-requisites for this course.

Required Text:

Corporate Finance, 9/e, by Stephen A. Ross, Randolph W. Westerfield, Jeffrey

Jaffe, McGrawHill (2013)

Reference Books:

Fundamentals of Corporate Finance, by Richard A. Brealey, Stewart C. Myers and

Alan J Marcus, McGraw-Hill

Corporate Finance Theory and Practice, by Aswath Damodaran,McGrawHill


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Lecture Sessions:

Students are expected to have read the assigned chapters of the text, and

recommended readings before the start of each class. In addition, student should attempt

to be well informed on current corporate issues through reading the financial press and

publications.

Grading Policy:

The success of this course is dependent upon each student being fully prepared for

each class period and entering into the class discussion. The instructor will be an active

member of the discussion group. Independent thinking is encouraged and friendly

disagreements are anticipated.

The final course grade will be based on:

Course requirements

1stMid-term 15%

2ndMid-term 15%

Class Participation, Quiz, Case Analysis, Presentation, Assignment 10%Final Exam 60%

Total 100%

There will be some bonus marks for active class participation, assignments,

presentation and quizzes for the deserving students.

Grading Scales:

We shall follow official grading policy of the University of Dhaka. Please contact

with the Department or BBA Program office for detail.

Mid-term Exams:

There will be two mid-term exams. You can expect short and/or multiple choice

questions including theory and quantitative problems in the mid-term exams. The first

and second mid-term exam will be held on the 6th and the 12th week of the semester

respectively. The detail will be announced in due time. Due to any unavoidable reason

(s), the same exam will be held on the immediate next week without any further notice.

Final Exam:

A comprehensive final exam will be held at the end of the semester. You can

expect both short type and essay type questions including theory and quantitative

problems in the final exam. The detail will be announced in due time.

Note:

No make-up exam will be given without prior arrangement with the instructor. Any

missed exam / paper will earn zero point. Academic dishonesty, such as cheating on the exam,

copying another students exam / paper or letting another student copy your exam / paper may

result in your receiving an F grade in the course.


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Selected Readings on Corporate Finance (SR):

1. Theory of Firm: Managerial Behavior, Agency cost and Ownership Structure

By Michael C. Jensen and William H. Meckling (1976)

2. Management Ownership and Market Valuation An empirical Analysis

By Randall Morck, Andrei Shleifer and Robert W. Vishny(1988)

3. Additional Evidence on Equity Ownership and Corporate Value

By John J. McConnell and Henri Servaes(1990)

4. The Theory of Capital Structure

By Milton Harris and Arthur Raviv (1991)

5. The Determinants of Cpaital Structure Choice

By Sheridan Titman And Roberto Wessels (1988)

6. Optimal Capital Structure under Corporate and Personal Taxation

By Harry DeAngelo and Ronald W. Masulis

7.

Dividend Policy under asymmetric informationBy Merton H. Miller and Kevin Rock (1988)

8. Dividend Clienteles and the information content of Dividend changes

By Mukesh Bajaj and Anand M. Vijh (1990)

9. Quarterly Dividend and Earnings Announcements and Stockholders Returns:

An Empirical Analysis

By Joseph Aharony and Itzhak Swary

10.Earnings and Dividend Announcements: Is There a Corroboration Effect?

By Alex Kane, Young Ki Lee, and Alan Marcus

11. Dividend Announcements: Cash Flow Signaling Vs. Free Cash Flow

Hypothesis?

By Larry H.P. Lang and Robert H. Litzenberger

Quizzes and assignments:

There will be at least three surprise quizzes. The duration of each quiz is

approximately 20 to 30 minutes. In addition, a group of maximum four students should

write a summary report, as an assignment, on any one of the selected readings (SR) as

mentioned above. Maximum two groups will be allowed to choose one SR. Your written

assignment (TNR, 12 font, double space, and 1 margin in all sides of A4 size paper)

should be within the range of 5 to 10 pages excluding cover page. Your assignmentshould have four parts namely, introduction and objectives, methodology used in the SR,

findings of the SR, and conclusion and recommendation.

Group Report:

There will be a group report to be prepared and presented by a group of 5 6

students. The group will be formed at the beginning of second week on a random basis.

The objective of this group report is to:


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(1)Analyze the cost of capital of some selected companies, or

(2)Analyze the impact of dividend on share price, or

(3)Analyze the capital structure of some selected companies.

Please, select FIVE publicly traded company from the same industry group

keeping the following points in mind that:

You have the access to get all relevant information for the purpose of

your report.

Annual reports for the last five years are available.

You have the ability to get insider information, if needed, to make your

report more authentic, reliable and accurate.

Other information:

(a)Maximum six groups will be allowed to do their report on a

particular objective as mentioned above.

(b)

Your written report should not exceed 50 pages includingcover page and references.

(c)Follow TNR, 12 font, double space, A4 size paper, and 1

margin in all sides, printed and bound properly.

(d)Your written report will carry 70% weight of the marks allotted

for this section and the remaining 30% marks reserve for the

presentation session of the same report.

(e)There will be one or two formal presentation sessions at the

end of second mid term test. Each group will be allowed 15

minutes to present their report followed by a 10 minutes Q and

A session. Only two members from each group should present

their report on be-half of the respective group.

(f) The written report is due for submission on the day of 2 ndmid-

term examination. Please keep in touch with the CRs for more

information.

(g)Group members will be assigned a common mark/grade (for

this section only) provided no objection is raised by any peer

group member(s).

Detailed Course Outline

Week # 1 Lecture # 1 Chapter # 1: Introduction to CF

Lecture # 2 Chapters # 2 and 3: Financial Planning and Models

Week # 2 Lecture # 3 Chapter # 4, 5, and 6: Investment Decisions

Lecture # 4 Chapter # 4, 5, and 6: Investment Decisions


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Week # 3 Lecture # 5 Chapters # 7: Capital Budgeting under uncertainty

Lecture # 6 Chapters # 7: Capital Budgeting under uncertainty

Week # 4 Lecture # 7 Chapters # 7: Capital Budgeting under uncertainty

Lecture # 8 Chapter # 15, 16 and 17: Capital Structure Decisions

Week # 5 Lecture # 9 Chapter # 15, 16 and 17: Capital Structure Decisions

Lecture # 10 Chapter # 15, 16 and 17: Capital Structure Decisions

Week # 6 Lecture # 11 Chapter # 18: Valuation and CB for Levered Firm

Lecture # 12 Chapter # 18: Valuation and CB for Levered Firm

Week # 7 Lecture # 13 1stMid Term Examination

Lecture # 14 Chapter # 19: Dividend Policy and Other Payouts

Week # 8 Lecture # 15 Chapter # 19: Dividend Policy and Other Payouts

Lecture # 16 Chapter # 19: Dividend Policy and Other Payouts

Week # 9 Lecture # 17 Chapter # 30: Corporate Restructure and Financial Distress

Lecture # 18 Chapter # 30: Corporate Restructure and Financial Distress

Week # 10 Lecture # 19 Chapter # 31: International Financial Management

Lecture # 20 Chapter # 31: International Financial Management

Week # 11 Lecture # 21 Chapter # 31: International Financial Management

Lecture # 22 Chapter # 31: International Financial Management

Week # 12 Lecture # 23 2ndMid Term Examination

Lecture # 24 Case Analysis and Presentation of SR

Week # 13 Lecture # 25 Case Analysis and Presentation of SR

Lecture # 26 Presentation of Group Report

Week # 14 Lecture # 27 Presentation of Group Report

Lecture # 28 Presentation of Group Report

Week # 15 Lecture # 29 Review of Chapters for first MT

Lecture # 30 Review of Chapters for second MT

Exam Week and Final Exam

course outline cf 3202 bba 18th

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