Kurso programos
CORPORATE FINANCE (Vilnius University Faculty of Economics Finance Master Programme)
VILNIUS UNIVERSITY
Faculty of Economics
CORPORATE FINANCE
The course is dedicated to students of Finance Master Programme
Prepared by prof. dr. Arvydas Paškevičius
The aim of the course is to form theoretical and practical finance management skills that would enable one to successfully plan, organise, analyse, and assess the financial performance of a company and the projects of its development. The competences trained in the course include:
- the knowledge of theoretical and practical finance management principles;
- the ability to assess the financial condition of a company and to prepare and apply financial accountability reports;
- the ability to prepare projects of a company‘s financial activity and to plan its development.
The course consists of 24 hours, 5 credits.
SYLLABUS
1. Introduction to Corporate Finance
1.1. Corporate Finance and the Financial
Manager
1.2. The Forms of Business Organization
1.3. The Goal of Financial Management
1.4. The Agency Problem and Control of the Corporation
1.5. Financial Markets and the Corporation
2. Financial Statements and Cash Flow
2.1. The Balance Sheet
2.2. The Income Statement
2.3. Cash flow
3. Working with Financial Statements
3.1. Cash Flow and Financial Statements: A Closer Look
3.2. Standardized Financial Statements
3.3. Ratio Analysis
3.4. The Du Pont Identity
3.5. Using Financial Statement information
Lecture Notes Q&P Test Questions
4. Long-term Financial Planning and Growth
4.1. What is Financial Planning?
4.2. Financial Planning Models: A First Look
4.3. The Percentage of Sales Approach
4.4. External Financing and Growth
Lecture Notes Q&P Test Questions
5. The Time Value of Money
5.1. Future Value and Compounding
5.2. Present Value and Discounting
5.3. More on Present and Future Values
Lecture Notes Q&P Test Questions
6. Discounted Cash Flow Valuation
6.1. Present and Future Values of Multiple Cash
Flows
6.2. Valuing Level Cash Flows: Annuities and Perpetuities
6.3. Comparing Rates: The Effect of Compounding
6.4. Loan Types and Loan Amortization
Lecture Notes Q&P Test Questions
7. Interest Rates and Bond Valuation
7.1. Bonds and Bond Valuation
7.2. More on Bond Features
7.3. Bond Ratings
7.4. Some Different Types of Bonds
7.5. Bond Markets
7.6. Inflation and Interest Rates
7.7. Determinants of Bond Rates
Lecture Notes Q&P Test Questions
8. Stock Valuation
8.1. Common Stock Valuation
8.2. Some Features of Common and Preferred Stock
8.3. Stock Markets
Lecture Notes Q&P Test Questions
9. Net Present Value and Other Investment Criteria
9.1. Net present value
9.2. The Payback Rule
9.3. The Discounted Payback
9.4. The Average Accounting Return
9.5. The Internal Rate Of Return
9.6. The Profitability Index
Lecture Notes Q&P Test Questions
10. Making Capital Investment Decisions
10.1. Project Cash Flows: A First Look
10.2. Incremental Cash Flows
10.3. Pro Forma Financial Statements and Project Cash Flows
10.4. More on Project Cash Flow
10.5. Alternative Definitions of Operating Cash Flow
10.6. Some Special Cases of Cash Flow Analysis
Lecture Notes Q&P Test Questions
CASE ANALYSIS AND PRESENTATION
Student’s registration of case studies
Send requests and presentations: arvydas@paskevicius.com
The example ofpresentation: Butler Lumber Company Presentation Excel
Slide presentations limited to a duration of 10-15 minutes. (desirablein the University form of presentations). Presentations file name must be shortened name of the case. Calculation tables, as additional material illustrating the decision is contained in the Excel form. The presentation you have to send no later than 24 hours before the presentation. The first slide specify: the theme and the author (s) surname (s).
Case studies do not have a straight answer. Different people shall bring a unified solution, so the analysis of the case must present YOUR decision and justify it argumentative. The analysis of the test should be kept in mind that the latest information about the problem and the company can be find on the internet.
Assessment of case analysis and presentation:
1. Presentations submission timeliness, slide quality, oratorical art, audience involvement in the case study 0-3.
2. The complexity of the analyzed problem 0-3
3. Case studies breadth, i.e. quite a lot of work done 0-4
4. Depth of the case analysis, i.e. use sophisticated analytical techniques 0-4
5. It was collected an additional, interesting and valuable material on the Internet. For example., how the company is now doing, what the consequences, modern innovations. 0-2
6. A summary of the findings, what is memorable, the most valuable of the case presented, where you can apply the acquired knowledge 0-2
7. Working as opponent of the peer presentations or active participation in the cases analysis 0-1. Good questions or comments prized pluses, 3-4 pluses equal to 1 point.
Introductory Exercises
1-1Assessing a Firm's Future. Financial Health
Financial Health (1-16 psl.) (Financial Ratio analysis)
Tire City, Inc. (17-18 psl.) (Forecasting Pro Forma Financial statements) Presentation Excel
| Gintė Mockienė |
Estimating Funds Requirements - Short-Term sources of Funds
1-2Estimating Funds Requirements - Short-Term sources of Funds
Butler Lumber Company (21-24 psl.) (Funding Growth)
Note on Bank Loans (25-37 psl. ) (Funding Growth)
Toy World inc. (39-44 psl.) (Funding Seasonal Needs) Presentation Excel
| Matthias Lohmann |
| Friedrich Röper |
SureCut Shears, Inc. (45-52 psl.) (Funding Cyclical Needs)
Dell's Working Capital (53-57 psl.) (Managing working capital)
Hampton Machine Tool Company (59-64 psl.) (Cash budgeting)
Debt Policy and Long-Term Financing
E.I. du Pont de Nemours and Company (1983) ( 67-78 psl.) (Target Debt Policy)
Williams, 2002 ( 79-92 psl.) (Costs of Financial Distress)
The Loewen Group, Inc (Abridged) (93-105 psl.) (Costs of Financial Distress)
American Home Products Corporation (107-112 psl.) (Capital Structure Decisions) Ramazan Sahin Presentation Excel
Debt policy at UST Inc. (113-127 psl.) (Capital Structure Decisions)
Diageo plc (129,130-142 psl.) (Capital Structure Decisions)
Continental Carriers, Inc. ( 143-149 psl. ) (Earnings impact of Leverage)
Hospital Corporation of America (A) (151-164 psl.) (Credit Ratings and Access to Debt Markets)
Stone Container Corporation (A) (165-179 psl.) (Equity Financing)
MCI Communications Corporation (1983) (179-185 psl.) (Equity-Linked Securities)
Cox Commucations, Inc. (1999) (193-209 psl.) (Equity-Linked Securities) Presentation Excel
| Jacopo Piccioni |
| Michele Fornaro's |
Compania de Telefonos de Chile (211-224 psl.) (Cross-Border Financing)
Divident Policy at FLP Group, Inc. (A) (225-241 psl.) (Cash distribution)
Ford Motor Company's Value Enhancement Plan (A) (243-259 psl.) (Recapitalization)
Marriott Corporation (A) (261-276 psl.) (Event risk) Presentation Excel
| Azad Yılmaz |
| Nijat Mehdizade |
Introduction to Derivative Instruments (277-296 psl.) (Basic Derivative Instruments)
Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) (297-299 psl.) (Valuing Derivatives) Ravindra Pandhey Presentation
Student Educational Loan Fund, Inc. (Abridged) (301-309 psl.) (Interest Rate Derivatives)
Arley Merchandise Corporation ( 311-317 psl. ) (Options and Security Design)
The Pension Plan of Bethlehem steel (2001) (319-336 psl.) (Pension Fund Risk Management)
Tiffany & Company (1993) (337-346 psl.) (Risk Identification and Selection of Risk-Management Techniques)
United Grain Growers Limited (A) (347-361 psl.) (Risk Identification and Selection of Risk-Management Techniques)
Valuation and Investment
Valuing Capital investment Projects (365-369 psl.) (Discounted Cash Flow Analysis)
Merck & Company: Evaluating a Drug Licensing Opportunity (371-376 psl.) (Introduction to Decision Trees)
Tree Values (377-379 psl.) (Basic Value Creation) .
The Super Project (381-394 psl.) (Identifying Incremental Cash Flow)
NetFlicx.com, Inc. (395-404 psl.) (Forecasting Expected Cash Flow)
A-Rod: Signing the Best Player in Baseball (405-418 psl.) (Forecasting Expected Cash Flow) Presentation Excel
| Ifratul Islam Sani |
| Eldar Karabayev |
Ocean Carriers (419-424 psl.) (Capital Budgeting)
Whirlpool Europe (425-430 psl.) (Capital Budgeting) Presentation Excel
| Ieva Koncevičiute |
| Marius Kurlavičius |
Health Development Corporation (431-434 psl.) (Multiples)
Cost of Capital and Valuation
Diversification, the Capital Asset Pricing Model and the Cost of Equity Capital (435- 445 psl. )
Cost of Capital at Ameritrade (447-466 psl. ) (Capital Asset Pricing Model and the Cost of Equity Capital)
Pioneer Petroleum Corporation (467-472 psl.) (Risk and the Opportunity Cost of Capital)
Leverage Betas and the Cost of Equity (473-482 psl.) (Leverage Betas)
Marriott Corporation: the Cost of Capital (Abridged) (483-491 psl.) (Weighted Average Cost of the Capital)
SCHEDULE FOR THE WORK
|
# |
S.D. |
Data |
Time |
Room |
Chapter |
Notes |
|
1 |
Tue |
12-Sep |
17:30-19:00 |
707 |
Introduction to the Course. Introduction to Corporate Finance. Financial Statements and Cash Flow. |
Homework: Chapter 1 Test Questions; Chapter 2 Test Questions; Chapter 3 Questions and Problems # 1-5, 11, 13, 14, 16, 17, 26-30. Chapter 3 Test Questions. Chapter 4 Questions and Problems # 1-8. Chapter4 Test Questions |
|
2 |
Tue |
12-Sep |
19:10-21:00 |
707 |
Working With Financial Statements.Long-term Financial Planning and Growth |
|
|
3 |
Thu |
14-Sep |
17:30-19:00 |
707 |
Chapter 1 Test Questions; Chapter 2 Test Questions; Chapter 3 Questions and Problems # 1-5, 11, 13, 14, 16, 17, 26-30. Chapter 3 Test Questions |
Homework: Chapter 5 Questions and Problems # 1-9. Chapter 5 Test Questions. Chapter 6 Questions and Problems # 1-15. Chapter 6 Test Questions. |
|
4 |
Thu |
14-Sep |
19:10-21:00 |
707 |
The Time Value of Money Discounted Cash Flow Valuation |
|
|
5 |
Fri |
15-Sep |
17:30-19:00 |
707 |
Chapter 5 Questions and Problems # 1-9. Chapter 5 Test Questions. Chapter 6 Questions and Problems # 1-15. Chapter 6 Test Questions. |
Homework: Chapter 7 Questions and Problems # 1-12, 15, 18, 21. Chapter 7 Test Questions. Chapter 8 Questions and Problems # 1-13. Chapter 8 Test Questions. |
|
6 |
Fri |
15-Sep |
19:10-21:00 |
707 |
Interest Rates and Bond Valuation. Stock Valuation |
|
|
7 |
Tue |
19-Sep |
17:30-19:00 |
707 |
Chapter 7 Questions and Problems # 1-12, 15, 18, 21. Chapter 7 Test Questions. Chapter 8 Questions and Problems # 1-13. Chapter 8 Test Questions. |
Homework: Chapter 9 Questions and Problems # 1-16. Chapter 9 Test Questions. |
|
8 |
Tue |
19-Sep |
19:10-21:00 |
707 |
Net Present Value and Other Investment Criteria. |
|
|
9 |
Thu |
21-Sep |
17:30-19:00 |
707 |
Chapter 9 Questions and Problems # 1-16. Chapter 9 Test Questions. |
Homework: Chapter 10 Questions and Problems # 1-15. Chapter 10 Test Questions. Preparation for Case study prezentations |
|
10 |
Thu |
21-Sep |
19:10-21:00 |
707 |
Making Capital Investment Decisions. Case study prezentations |
|
|
11 |
Tue |
26-Sep |
17:30-19:00 |
707 |
Homework: Chapter 10 Questions and Problems # 1-15. Chapter 10 Test Questions. |
Homework: Preparation for examination. Self-test. |
|
12 |
Tue |
26-Sep |
19:10-21:00 |
707 |
Case study prezentations |
|
|
13 |
Tue |
3-Oct |
17:30-19:00 |
EC |
Exam |
|
|
14 |
Tue |
3-Oct |
19:10-21:00 |
707 |
Case study prezentations |
LITERATURE
1. Fundamentals of Corporate Finance, Ross, S. A. 2010.
2. Principles of Corporate Finance, Brealey, Myers, 2010.
3. Financial Management, Ray M. Brooks. 2010.
4. Capital Markets, Fabozzi Modigliani. 2010 .
5. Case Problems In Finance, W. Carl Kester, Richard S. Ruback, Peter Tufano.2010.
Textbook materials (access can be granted individually) Ch1 Ch2 Ch3 Ch4 Ch5 Ch6 Ch7 Ch8 Ch9 Ch10
EVALUATION
Assessment requirements:
Analysis and solutions of tasks and problems at seminars, case study task and examination.
Final assessment criteria:
The grade assigned for problem solution at seminars is multiplied by 0.20.
The grade assigned for case study task solution is multiplied by 0.50.
Examination shall be taken by electronic means at the Examination center. Students are required to solve tasks presented in the test. The grade of the examination is multiplied by 0.3 and shall be added to the final result.
Composition of the final accumulative grade
The final accumulative grade shall be composed of:
Problem solutions at seminars – 20 %
Case study task solution – 50%
Examination – 30%
Grįžti