JAIPURIA INSTITUTE OF MANAGEMENT

PGDM; TRIMESTER V; ACADEMIC YEAR 2018-19

Course Code and Title FIN 404: Advanced Corporate Finance

Credits 3

Term and Year III Term, 2019 -20

Course Pre-requisite(s) Student must have successfully

completed the fundamental and core
finance courses

Course Requirement(s) Excel Spread Sheet Application

Course Schedule (day and time of class)

Classroom # (Location)

Course Instructor

Email

Telephone Number (for office

appointments)

Student Consultation Hours

Office Location

Course Overview

The course has been designed keeping in mind that students have already studied the
introductory courses on accounting and corporate finance during their earlier trimesters. This
course is intended to develop the understanding of students about the advance level of financial
management decisions
.
The objective of this course is to enable students to develop a deep understanding about the
advanced topics of corporate finance which concern finance managers while taking financial
decisions for firms which are operating in today’s sophisticated and complicated market
scenario. The course will cover five important extensions of Financial Management, that is,
advanced capital budgeting; Valuation; Corporate Restructuring; Risk Management; and
International Financial Management.
Learning Outcomes

After undergoing this course, the participants will be able to:

CLO1: Compute the market value of equity, market value of debt and market value of firm.
CLO2: Analyze risk in capital budgeting decisions.
CLO3: Analyze financial risk management decisions.
CLO4: Analyze corporate restructuring decisions such as mergers and acquisitions.
CLO5: Analyze financial decisions in the context of multinational corporations.

Mapping of CLOs with PLOs

PLO 1 PLO PLO 3 PLO4 PLO5 PLO6 PLO7 PLO8

2
CLO 1 X(M) X(L)
CLO 2 X(H) X(L)
CLO 3 X(M) X(M)
CLO 4 X(M) X(L)
CLO 5 X(M) X(M)

Prescribed Text:

Text Book
Brigham, Eugene F. and Ehrhardt, Michael C., Cengage Learning (New Delhi), 14th Edition.

Reference Book:
Brealey, Myers ,Allen and Mohanty, Principles of Corporate Finance, TMH, Tenth Edition

Assessment

Sl. Components Description Weightage (%) CLO

01 Quizzes There shall be four quizzes, 10 CLO1, CLO2,
equally distributed before and CLO3, CLO4,
after mid-term examination. CLO5
The quizzes will be designed
in such a way so as to evaluate
students on two parameters:
Knowledge and Application.
02 Group Project It will be on group (group of 4 20 CLO4
students) basis. Project will
involve application of course
content to the Indian
industries.
03 Individual It will be an individual 10 CLO1
Assignment assignment which will involve
application of valuation
models to value Indian
companies.
03 Discussion It will be based on how 10 CLO2, CLO5
Forum/Class students actively participate in
 participation class/discussion to get good
learning experience.
04 End-term It will be based on entire 50 CLO1, CLO2,
examination syllabus. The question paper CLO3, CLO4,
will be designed in such a way CLO5.
so as to evaluate students on
three parameters: Knowledge;
Application and Higher Order
Skills.

Session Plan

Session Topic/Sub Topic Session Details

No.
1 Introduction of Text Chapter 1
Course : Course Book/
overview, Reading
Pedagogy Discussion
CLO
SLO

2. Approaches to Text Chapter 7

Valuation. Book /
Reading
Pedagogy Class discussion

CLO 1

SLO At the end of the session, the student will be able to

understand different approaches to valuation.
3 Valuation of Bond. Text Chapter 7
Book/
Reading
Pedagogy Class discussion; Case Exercise; Excel Spreadsheet
Application
CLO 1

SLO At the end of the session, the student will be able to

compute market value of bond.
4 Valuation of Equity Text Chapter 7
Using Dividend Book/
Discount Model and Reading
FCFE Model.
Pedagogy Class discussion; Case Exercise; Excel Spreadsheet
Application.
CLO 1
 SLO At the end of the session, the student will be able to
compute market value of equity of a firm using dividend
discount model and free cash flow to equity model.
5 Valuation of Firm Text Chapter 7
Using FCFF Model. Book/
Reading
Pedagogy Class discussion.
CLO 1
SLO At the end of the session, the student will be able to
compute market value of a firm using free cash flow to
firm model.
6 Valuation of Equity Text Chapter 7
and Firm Using Book/
Earning Multiples. Reading
Pedagogy Class discussion; Case Exercise; Excel Spreadsheet
Application.
CLO 1
SLO At the end of the session, the student will be able to
compute market value of equity and market value of a
firm using earning multiples methods.
7 Measurement of Text Chapter 11
Risk in Capital Book/
Budgeting Reading
Decisions. Pedagogy Class discussion; Case Exercise; Excel Spreadsheet
Application.
CLO 2
SLO At the end of the session, the student will be able to
measure risk of a project.
8 Risk analysis in Text Chapter 11
capital budgeting- Book/
Sensitivity analysis Reading
Pedagogy Class discussion; Case Exercise; Excel Spreadsheet
Application.
CLO 2
SLO At the end of the session, the student will be able to
analyze the impact of change in different factors (price,
variable cost, risk, quantity and fixed cost) on capital
budgeting decisions.
9 Risk Analysis in Text Chapter 11
Capital Budgeting- Book/
Scenario Analysis. Reading
Pedagogy Class discussion; Case Exercise; Excel Spreadsheet
Application.
CLO 4
SLO At the end of the session, the student will be able to
analyze risk in capital budgeting decisions under
different scenario (Base, Worst and Best).
10 Risk Analysis in Text Chapter 11
Capital Budgeting- Book/
Simulation Analysis. Reading
 Pedagogy Class discussion; Case Exercise; Excel Spreadsheet
Application.
CLO 2
SLO At the end of the session, the student will be able to
analyze risk in capital budgeting decisions using Monte
Carlo Simulation (by combining sensitivities, probability
distribution and correlation among the input variables).
11 Risk Analysis in Text Chapter 11; Handout
Capital Budgeting- Book/
Risk Adjusted Reading
Discount Rate and Pedagogy Class discussion; Case Exercise; Excel Spreadsheet
Certainty Equivalent Application.
Approach. CLO 2
SLO At the end of the session, the student will be able to
understand the application of risk adjusted discount rate
and certainty equivalent approach in capital budgeting
decisions.
12 Investment decisions Text Handout.
with capital Book/
rationing. Reading
Pedagogy Class discussion; Case Exercise; Excel Spreadsheet
Application.
CLO 2
SLO At the end of the session, the student will be able to
analyze capital budgeting decisions under the condition
of capital rationing (scarcity of capital).
13 Overview of Text Handout
Financial Book/
Derivatives Reading
Pedagogy Class discussion

CLO 3
SLO At the end of the session, the student will be able to
develop understanding of derivative products which used
to hedge different kinds of risk.
14 Managing Risk Text Chapter 23
through Futures Book/
Reading
Pedagogy Discussion
CLO 3

SLO At the end of the session, the student will be able

manage price risk using futures.
15 Managing Risk Text Chapter 23
through Options Book/
Reading
Pedagogy Class discussion; Case Exercise; Excel Spreadsheet
Application.
 CLO 3

SLO At the end of the session, the student will be able

manage price risk using options.
16 Managing Interest Text Chapter 23
Rate Risk through Book/
Interest Rate Swap. Reading
Pedagogy Class discussion; Case Exercise; Excel Spreadsheet
Application.

CLO 3
SLO At the end of the session, the student will be able
manage interest rate risk using interest rate swap.
17 Mergers and Text Chapter 22
Acquisitions- Book/
Overview Reading
Pedagogy Class discussion; Case Exercise; Excel Spreadsheet
Application.
CLO 4

SLO At the end of the session, the student will be able to

understand the rationale behind mergers and
acquisitions.
18 Merger Analysis Text Chapter 22
Book/
Reading
Pedagogy Class discussion
CLO 4

SLO At the end of the session, the student will be able to

analyze mergers and acquisitions decisions.
19 Demerger Analysis Text Chapter 22; Handout.
Book/
Reading
Pedagogy Class discussion; Case Exercise; Excel Spreadsheet
Application.
CLO 4
SLO At the end of the session, the student will be able to
analyze demerger decisions (Spin off, split up and
divestiture).
20 Management Text
Takeover – Value of Book/ Handout
Corporate Control Reading
Pedagogy Class discussion; Case Exercise; Excel Spreadsheet
Application.
CLO 4
SLO At the end of the session, the student will be able to
analyze management takeover decisions.
 21 Foreign Exchange Text Chapter 17
Market – Exchange Book/
Rate Determination Reading
Pedagogy Class discussion; Case Exercise; Excel Spreadsheet
Application.
CLO 5

SLO At the end of the session, the student will be able to

understand how the exchange rates are determined in
foreign exchange markets.
22 Managing Foreign Text Chapter 17
Exchange Risk Book/
Reading
Pedagogy Class discussion; Case Exercise; Excel Spreadsheet
Application.
CLO 5

SLO At the end of the session, the student will be able to

manage foreign exchange risk using derivative products.
23 Multinational Text
Capital Budgeting Book/ Chapter 17
Decisions. Reading
Pedagogy
Class discussions

CLO 5

SLO At the end of the session the student will be able to

analyze capital budgeting decisions in the context of
multinational corporations.
24 Summing up, Feedback and Learning Integration

Guest Session Plan: Two sessions will be conducted by Guest Speakers from industry as per the
following schedule:
SNo. Topic Session Objective & CLOs Schedule
1 Mergers and The student will develop an Session no. 19
Acquisitions. understanding on how mergers and
acquisitions are taken from the
perspective of the industry.
CLO 4
2 Foreign Exchange Risk The student will develop an
Management understanding on how foreign exchange Session No. 23
risk is managed by multinational
corporations.
CLO 5
 Assessment of Programme Learning Outcomes (PLOs) and Course Learning Outcomes (CLOs).
Programme Learning
Outcomes (PLOs)
Communicate effectively
and display inter-personnel
skills.
Demonstrate leadership and
teamwork towards
achievement of
organizational goals.
Apply relevant conceptual
frameworks for effective
decision-making.
Develop an entrepreneurial
mindset for optimal business
solutions.
Evaluate the relationship
between business
environment and
organizations.
Appreciate sustainable and
ethical business practices.
Course Learning Outcomes Course Assessment Item
(CLOs)
Not Specifically Assessed
Not Specifically Assessed
CLO1: Compute the market CLO1: Quiz-1; Individual
value of equity, market value Assignment; End-Term.
of debt and market value of CLO2: Quiz-2; Discussion
firm. Forum; End-Term.
CLO2: Analyze risk in capital CLO3: Quiz 3; End-Term.
budgeting decisions. CLO4: Quiz 4; End-Term
CLO3: Analyze financial risk CLO5: Quiz 4; End-Term;
management decisions. Discussion Forum.
CLO4: Analyze corporate
restructuring decisions such as
mergers and acquisitions.
CLO5: Analyze financial
decisions in the context of
multinational corporations.
Not Specifically Assessed
CLO1: Compute the market CLO1: Quiz-1; Individual
value of equity, market value Assignment; End-Term.
of debt and market value of CLO2: Quiz-2; Discussion
firm. Forum; End-Term.
CLO2: Analyze risk in capital CLO3: Quiz 3; End-Term.
budgeting decisions. CLO4: Quiz 4; End-Term
CLO3: Analyze financial risk CLO5: Quiz 4; End-Term;
management decisions. Discussion Forum.
CLO4: Analyze corporate
restructuring decisions such as
mergers and acquisitions.
CLO5: Analyze financial
decisions in the context of
multinational corporations.
Not Specifically Assessed
Leverage technology for Not Specifically Assessed
business decisions.

Demonstrate capability as Not Specifically Assessed

an independent learner

Institute’s Policy Statements

It is the responsibility of every student to be aware of the requirements for this course, and
understand the specific details included in this document. It is emphasized that this course
requires a significant commitment outside of formal class contact.  The learning tasks in this
course may include classes (lectures or seminars), required reading, the preparation of answers to
set questions, exercises and problems, and self-study. In addition, students may be required to
complete an assignment, test or examination.

LMS-Moodle/Impartus:
LMS-Moodle/Impartus is used to host course resources for all courses. Students can download
lecture, additional reading materials, and tutorial notes to support class participation.
 
Late Submission
Assessment tasks submitted after the due date, without prior approval/arrangement, will be not
be accepted. Requests for extension of time must be made with the faculty member concerned
and based on Special Consideration guidelines. 
 
Plagiarism:
Plagiarism is looked at as the presentation of the expressed thought or work of another person as
though it is one's own without properly acknowledging that person.
 
Cases of plagiarism will be dealt with according to Plagiarism Policy of the institute. It is also
advisable that students must not allow other students to copy their work and must take care to
safeguard against this happening. In cases of copying, normally all students involved will be
penalised equally; an exception will be if the student can demonstrate the work is their own and
they took reasonable care to safeguard against copying.