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Corporate Finance (FIN722) Syllabus For Mid Term Exams: Recommended Books

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Corporate Finance (FIN722)

Syllabus for Mid Term Exams

Recommended Books
 Fundamental of Corporate Finance by: Richard A. Brealey, Stewart C. Myers
 Fundamentals of Corporate Finance by: Stephen A. Ross, Randolph W. Westerfield,
Bradford D. Jordan

Note:
Syllabus for midterm examination includes the complete content covered in first 22 lectures
of the course and has been provided below with list of topics covered in these lectures.

The paper will be of subjective type only means it may include both numerical and
theoretical questions but will not carry any MCQ. You will have to attempt all the
questions. The major content of this course consists of numeric concepts so, much practice
is needed for good preparation.

Students are advised to consult the recommended books along with video lectures, updated
PPTs, supplements provided along with these PPTs in different lectures on VULMS of the
course to prepare for mid-term examination.

Topics:

01. Introduction to Corporate Finance & Comparison of Financial


Statements
Video lectures # 01 & 2
 Capital budgeting
 Types of businesses
 Financial statements and corporate finance
 Common Size analysis
 Ratio analysis

02. Time Value of Money


Video lecture # 03
 Future value and compounding
 Present value and discounting
 Annuity
 Perpetuity

03. Discounted Cash Flow & Effective Annual Interest


Video lecture # 04
04. Bond Valuation
Video lectures # 04 & 05
 Features of bond
 Bond valuation
 Nominal & real interest rate (Fisher Effect)

05. Term Structure of Interest Rates and Stock Valuation


Video lectures # 06 & 07
 Term Structure of Interest Rates
 Common stock valuation
 Dividend discount models (zero growth, constant growth and non-constant growth models)

06. Capital Budgeting


Video lectures # 08, 09, 10 & 11
 Capital budgeting process, relevant & non relevant costs
 Net present value including concept of relevant & non relevant cost
 Internal Rate of Return (including all its relevant concepts)
 Payback period
 Discounted payback period
 Accounting rate of return
 Profitability Index

07. Break-Even Analysis & Capital Rationing


Video lectures # 12, 13 & 14
 Sensitivity analysis
 Probability analysis
 Accounting break-even
 Economic break-even
 Degree of operating leverage
 Capital Rationing (including single period capital rationing)

08. Risk and Return


Video lectures # 15, 16 & 17
 Expected returns, variance and standard deviation of single stock over time
 Market variance based upon past performance
 Portfolio expected returns, variance and standard deviation
 Systematic risk, unsystematic risk and beta
 Aggressive & defensive stocks
 Security Market Line (SML) and cost of capital (CAPM)
 Over & under-valued stocks
09. Cost of Capital and Capital Structure
Video lectures # 18, 19 & 20
 Cost of equity (including estimation of growth rate, dividend growth model and security
market line)
 Cost of debt and preferred stock
 Weighted average cost of capital
 Pure Play
 Capital structure and financial leverage

10. Cost of Capital


Video lectures # 21 & 22
 MM propositions with taxes and without taxes
 Bankruptcy costs (direct & indirect)
 Static trade-off theory
 Dividend policies (including all relevant concepts discussed in the video lecture)

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