MBA 2424 Corporate Finance
MBA 2424 Corporate Finance
This course provides students with a conceptual framework and technical tools for making corporate investment decisions. The course focuses on maximizing the firm’s value and highlights various ethical issues.
- The objectives of corporate financial management and potential financial and ethical conflicts of stakeholders.
- Financial management as an integral part of corporate strategy
- Financial metrics for evaluating corporate financial performance.
- Basics of financial markets and instruments.
- The tradeoff between financial risk and financial reward, and its implications for investment and financing decisions.
- Evaluating of corporate financial performance.
- Making financial plans for company growth.
- Performing corporate investment analysis.
After completing this course, students should reexamine their companies’ financial management, including performance metrics and financial control. They should also relate their job functions to their corporate financial goals.
1 The Objective of Corporation.
What is a corporation? What is the objective of a corporation? Who are responsible for achieving such objective? What are the issues that can arise when a corporation is publicly owned? How can financial decisions be made in accordance to social and ethical norms?
Readings: Notes.
2. Accessing Financial Performance
What are the drivers of financial performance? We will discuss the basics of evaluating financial performance based on financial statements.
Readings: Higgins Chapter 1, 2
3. Managing Growth
How should the firm manage its short term cash flow? How can a firm sustain its growth?
Readings: Higgins Chapters 3, 4.
4. The Time Value of Money and Discounted Cash Flow.
A dollar today is more than a dollar tomorrow. The concepts of future value of money (compounding) and present value of money (discounting) will be introduced to make money of different periods comparable. We will also look at two special types of cash flows of multiple periods: annuity and perpetuity, and their applications.
Reading: Higgins, pp. 240-245
5. Financial Markets and Instruments.
We will discuss the basic features of bond, common stock and preferred stock. We will introduce Discounted Dividend Model for valuations of stocks, and in particular, we will emphasize the relationship between dividend growth rate and stock price. How firms raise capital. We will focus on equity financing, and in particular IPO.
Readings: Higgins Chapter 5, 6.
6. Risk Analysis & Cost of Capital.
We will discuss the concept of risk and characterize the relationship between risk and expected return by using Security Market Line. We will also look at the history of capital markets. We will discuss how to estimate the cost of equity and debt, and we will show the cost of a firm’s capital is the weighted average of the costs of its debt and equity. We will find the cost of capital and the expected return on capital are the two sides of the same coin.
Readings: Higgins Chapter 8.
7. Net Present Value and other Investment Criteria.
We will introduce Net Present Value as the basic investment criterion. We will also lay out a few alternative criteria and compare their strengths and weaknesses. We will see NPV in action by examining a few cases of investment decisions. Some practical details in using NPV will also be discussed.
Readings: Higgins Chapter 7.
2 of the teaching hours in this course are dedicated to CSR, ethics, social and environmental issues, including in
- The objective of corporation
- Accessing financial performance
- Net present value and other investment criteria
The course is conducted as a teaching module, where students have classes all day for four subsequent days, a total of 32 hours.
Excel will be used as a tool.
Candidates may be called in for an oral hearing as a verification/control of written assignments.
The course is a part of a full MBA and examination in all courses in the MBA programme must be passed in order to obtain a certificate for the MBA degree.
In all BI Executive courses and programmes, there is a mutual requirement
for the student and the course responsible regarding the involvement of the student's experience in the planning and implementation of courses, modules and programmes. This means that the student has the right and duty to get involved with their own knowledge and practice relevance, through the active sharing of their relevant experience and knowledge.
Granted admission to the BI-Fudan MBA programme. Please consult our student regulations.
Disclaimer
Deviations in teaching and exams may occur if external conditions or unforeseen events call for this.
| Assessments |
|---|
Exam category: Submission Form of assessment: Submission PDF Exam/hand-in semester: First Semester Weight: 30 Grouping: Group (2 - 6) Duration: 5 Day(s) Comment: This exam counts for 30% of the final grade and consist of two compulsory cases write-up's and 1 optional case write-up. The students must submit the presentations as PDF files. Exam code: MBA 24243 Grading scale: ECTS Resit: Examination when next scheduled course |
Exam category: School Exam Form of assessment: Written School Exam - pen and paper Exam/hand-in semester: First Semester Weight: 70 Grouping: Individual Support materials:
Duration: 2 Hour(s) Comment: Final written exam, counts 70% of the total grade. Exam code: MBA 24244 Grading scale: ECTS Resit: Examination when next scheduled course |
All exams must be passed to get a grade in this course.
| Activity | Duration | Comment |
|---|---|---|
Teaching | 24 Hour(s) | |
Prepare for teaching | 30 Hour(s) | |
Student's own work with learning resources | 56 Hour(s) |
A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 4 ECTS credit corresponds to a workload of at least 110 hours.