JAIPURIA INSTITUTE OF MANAGEMENT, NOIDA

PGDM (2022-24) BATCH; TRIMESTER-II; ACADEMIC YEAR 2022-23

Course Code and title 20202: Corporate Finance

Credits 3

Term and Academic Year II Term, 2022 -23

Course Pre-requisite(s) Accounting for Business

Course Requirement(s) Knowledge of spreadsheet applications

and Basics of Statistics

Classroom # (Location) As per time table

Course Instructor Dr Puneet Dubblish, Dr Nidhi Singh, Dr

Prashant Sharma

Email [email protected],
[email protected],
[email protected]

Telephone Number (for office

appointments)

Student Consultation Hours

Office location Puneet = First Floor (FFC11)

Nidhi = Second Floor (Next to Audi2)

Prashant = Second Floor (Faculty Cabin)

1. Course Overview
The introductory course of Corporate Finance has been designed for the business management
students to provide them an overview of the financial environment in which a firm operates and is
concerned with creation and maintenance of wealth in a rational way. Financial Management is a
managerial activity which calls for planning and controlling of the firm’s financial resources. In
its endeavour, it focuses on the decision making. Almost all decisions taken by an individual or a

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business firm have financial aspects and implications. Financial management is the study of
decisions that have financial implications and mainly comprise of investing, financing and
dividend decisions.

The course has been divided into six different modules which would take students from
understanding the role of financial manager of a firm in achieving the goal of the firm. Students
will learn how finance manager measures risk and return associated with any business activity and
takes the investment decision if compensation for taking risk is optimal. Students will also learn
how finance manager decides upon the optimal capital structure, profit distribution and working
capital management. Further a good knowledge of the Corporate Finance will help the students
to develop their understanding in the other domains like Marketing, Operations and Human
Resource Development as all planning and execution and performance measurement finally
take shapes in the form of financial figures. Return on investment reign supreme in any
business/ economic environment
2. Course Learning Outcomes

On successful completion of the course, you should be able to:

CLO1: Apply financial tools for decision making

CLO2: Analyze the long-term financial decisions of a business firm
CLO3: Analyze the short-term financial decisions of a business firm
CLO4: Identify ethical dilemmas in financial decisions

Mapping of CG-CLO

CG1 CG2 CG3 CG4 CG5

Communicate Demonstrate Apply Evaluate Awareness

Effectively the Ability to relevant different of impact of
Work in Teams conceptual ethical business
to Achieve frameworks perspectives decisions on
Desired Goals to a given issues of
business social
situation concern

CLO 1 X(R)

CLO2 X(I) X(R)

CLO 3 X(I)

CLO 4 X(I)

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Mapping of PLO-CLO

PLO 1 PLO 2 PLO 3 PLO 4 PLO 5 PLO 6

Communicate Demonstrate Reflect on Evaluate Comprehend Exhibit

Effectively the Ability to business different sustainability innovative
Work in situations ethical issues and
Teams to and apply perspectives creative
Achieve relevant thinking
Desired conceptual
Goals frameworks

CLO 1 X(R)

CLO2 X(I) X(R)

CLO 3 X(I)

CLO 4 X(I)

3. Course Modules

Overview of Corporate Finance and Risk-  Corporate Finance and Role of Financial
Return Manager
 Goal of a Firm, Agency Issue, Ethics in
Business
 Risk and return relationship
 Measures of Risk
 Risk diversification through portfolio
formation
 Systematic Risk vs. Unsystematic risk
 Beta concept, CAPM Model
Time Value of Money (TVM)  Concept and importance of TVM
 Present Value (PV) calculation
 Future Value (FV) calculation
 Annuities
 Perpetuities
 Mixed streams

Long-term Investment Decisions  Overview of Capital Budgeting

 Pay-Back Period, NPV, IRR. MIRR

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  Project evaluation – financial, ethical

 Estimating cost of various sources of capital

 WACC
Cost of Capital and Long-term Financing
 Capital structure and value of firm
Decisions
 Optimal capital structure
 Benefits and costs of using debt
 Types of Dividends
 Dividend Policy Issues, information
Dividend Decisions
content/signaling
 Clientele effect
 Establishing dividend policy
 Stock dividends & stocks splits, stock
repurchase
 Current assets investment policies
 Current assets financing policies
Working Capital Management
 Cash conversion cycle

4. Text Book

Parrino, R., & Kidwell, D. (2017). Fundamentals of Corporate Finance. New Delhi: Wiley India
Edition.
Suggested reference books:
 Brealey, R. A., Myers, S. C., Allen, F., 13th Edition (2020). Principles of Corporate
Finance. New Delhi: Tata McGraw- Hill.
 Brigham, E. F., & Houston, J. F. (2004). Fundamental of Financial Management (16th
Edition ed.). New Delhi: South Western -Cengage Learning India Private Limited.
 Megginson, W. L., Smart, S. B., & Gitman, L. J. (2007). Principles of Corporate
Finance. New Delhi: Cengage Learning India Private Limited.
 Damodaran, A.(2004).Corporate Finance - Theory and Practice (Second Edition) New
Delhi:Wiley India (P) Ltd.
 Bodhanwala, R. J. (2009). Financial Management Using Excel Spreadsheet. New Delhi:
Taxmann Publication.

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5. Assessment Tasks

Assessment Item Description Weightage CLO

Quiz There shall be 2 Quizzes, 20 % CLO1, CLO2
one for CLO 1 and other for
CLO 2.

Each Quiz shall comprise of

at least 10 MCQs. These will
be administered on LMS.
Minimum 30-questions’
Question bank will be
prepared and used for this
purpose.

Instructor may conduct

additional quizzes as a part of
formative assessment from
time to time.
Written case/MCQ Class test/MCQ shall be 5% CLO4
administered which will
assess the students’
capability in identifying the
ethical issues involved in
the given case let.
Build your model Each student will be 10% CLO1
Exercise required to build an excel
model depicting the
application of time value of
money concepts.
Group Project This should be a 20% CLO2
comprehensive project and
shall have elements of
Investing, Financing and
Dividend decisions, thus
covering the substantial
portion of the Corporate
Finance course.

Group project for each set

of students (i.e. Project
Group) shall be specific to
given industry/sector.

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 Class Performance Essentially formative 5%
assessment, shall capture the
students’ performance in class
activities on a regular basis;
Students’ preparedness for
each class; Ideas and relevant
& new things one adds to the
class room discussion
(essentials and desirable
components under VED
analysis) shall be considered.
Suggested important markers:
 Frequency of
participation
 Quality of deliberation
& comments
 Listening skills
End-Term Question paper will assess 40% CLO2, CLO3
Examination the student’s ability to
analyse the financial
decisions of a firm.

RUBRICS FOR ASSESSMENT COMPONENTS

RUBRICS FOR WRITTEN CASE ANALYSIS (10 Marks) (CLO 4)

Traits Below Meets Exceeds
Expectations Expectations Expectation
Marks in % Marks in % Marks in %
(less than 40%) (40% - 60% ) (more than
60%)
Identify ethical issues Little or no Identifies ethical Identifies
recognition of issues with some multiple ethical
Be able to recognize ethical pertinent discussion of the issues with
consequences of financial ethical issues most important complete
decisions in a business firm in a given applicable discussion of
situation. values. the values and
a framework for
resolution.

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RUBRICS FOR END TERM (40 Marks) (CLO2 & CLO3)
Traits Below Meets Exceeds
Expectations Expectations Expectation
Marks in % (less Marks in % Marks in %
than 40% ) (40% - 60% ) (more than
60%)
Select and Use Relevant Concepts and Has limited Selects and uses Selects and uses
Frameworks knowledge on relevant concepts relevant concepts
selecting and and frameworks. and frameworks.
 Demonstration of analytical skills & using relevant Requires minimal Needs no
logical reasoning based on concept, concepts and assistance in assistance in
theories, practices, regulatory frameworks. choosing relevant selecting relevant
framework relating to financial Requires concepts and concepts and
decisions such as investing, financing, extensive frameworks. frameworks.
dividend and working capital understanding
management. about selecting
relevant concepts
and
frameworks.

RUBRICS FOR PROJECT ASSIGNMENT (20 Marks) (CLO2)

Traits Below Meets Exceeds
Expectations Expectations Expectation
Marks in % (less Marks in % Marks in %
than 40% ) (40% - 60% ) (more than
60%)
Gather Relevant Information:
(Weightage -30%) Struggles to Clearly identifies Demonstrates a
 About the Organisation under study viz. pinpoint the the information sophisticated
Firm/ companies/industry from reliable information required. understanding of
sources needed. what information
 Assuring evidence of search /selection / Gathers information is needed.
collection of data, correctness and Gathers from multiple valid
completeness of data and information information from and reliable Gathers extensive
 Presentation of the gathered one source. sources. information from a
information in proper format & Style variety of valid and
Minimal evidence Evidence of reliable sources
of appropriate appropriate including journals,
search/selection search/selection texts, etc., specific
criteria. criteria. to the subject.

Unable to reflect Able to reflect and Clear evidence of

and comprehend understand the appropriate
the business business situation search/selection
situation due to because of the criteria.
poor understanding quality of
of required information Able to reflect and
information. gathered and have a holistic view
synthesized. of the business
situation based on
extensive

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 information
gathered from a
variety of sources
Select and Use Relevant Concepts and Has limited Selects and uses Selects and uses
Frameworks knowledge on relevant concepts relevant concepts
(Weightage -70%) selecting and and frameworks. and frameworks.
using relevant Requires minimal Needs no
 Demonstration of analytical skills & concepts and assistance in assistance in
logical reasoning based on concept, frameworks. choosing relevant selecting relevant
theories, practices, regulatory Requires concepts and concepts and
framework relating to long term extensive frameworks. frameworks.
financial decisions. assistance in
selecting relevant
concepts and
frameworks.

RUBRICS TO ASSESS THE GROUP PERFORMANCE OF STUDENTS DEMONSTRATING THE ABILITY

TO WORK AS TEAM(as an allied component of group project) (5M)(CLO 2 component mapped with CG2/PLO2)

Criterion Below Expectations Meets Expectations Exceeds Expectation

Marks in % (less than Marks in % (40% - 60% ) Marks in % (more than 60%)
40% )
Participation in Rarely listens to, shares Usually listens to, shares, Almost always listens to, shares
Group Tasks with, and supports the with, and supports the with, and supports the efforts of
(Based on peer efforts of others. efforts of others. others.
review)
Often is not a good team Tries to keep people working well
player together.
Contribution Rarely provides useful Usually provides useful Routinely provides useful ideas
ideas when participating ideas when participating in a when participating in a group
in a group task. group task. task.

May refuse to participate A strong group member who A leader who contributes a lot of
tries hard effort
Attitude Is often publicly critical Is rarely publicly critical of Is never publicly critical of the
of the project or the work the project or the work of project or the work of others.
of other members of the others.
group. Always has a positive attitude
Often has a positive attitude about the task(s)
Is often negative about about the task(s)
the task(s)

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RUBRICS FOR BUILD YOUR MODEL EXERCISE (CLO1)
Traits Below Expectations Meets Expectations Exceeds
Expectation
Marks in % (less than Marks in % (40% - Marks in % (more
40%) 60% ) than 60%)
Excel Functions Student is not able to Student is able to apply Students is able to
apply context-based partially context-based apply most of context-
(50%) formula/function to formula/function to based
extract relevant extract relevant formula/function
information for a given information for a given extract relevant
situation. situation information for a given
situation
Select and Use Relevant Has limited Selects and uses Selects and uses
Concepts and Frameworks knowledge on relevant concepts and relevant concepts and
(50%) selecting and using frameworks. Requires frameworks. Needs
 Demonstration of relevant concepts and minimal assistance in no assistance in
analytical skills & frameworks. Requires choosing relevant selecting relevant
logical reasoning extensive concepts and concepts and
based on concepts, understanding about frameworks. frameworks.
theories and selecting relevant
practices relating to concepts and
time value of money frameworks.

RUBRIC FOR QUIZZES (10 Marks) (CLO-1, 2)

Criteria Exceed Meet Expectation Below
Expectation Expectation
Demonstrate the level Answers 60% or Answers 40% or more Answers less than
of understanding of more questions but less than 60% 40% questions
concepts learned. correctly questions correctly correctly

6. Session Plan

Sessi Topic/ Sub Topic Reading Pedagogy Session Learning CLO

on Reference Outcomes

Module I: Overview of Corporate Finance and Risk-Return

1. Introduction to Chapter 1 Class At the end of the session, CLO4

Corporate Finance, Role discussion the student will be able to
of Financial Manager, describe the basics of
Goal of firm, Agency corporate finance,
conflicts, Importance of Warm up news primary goal of firm,
ethics in business story/video agency issues and
relevance of ethics in
business

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 2. Concept of risk and Chapter 7 Class At the end of the session, CLO1
return, relationship discussion, the student will be able to
between them, Numerical measure the risk and return
Measurement of risk and exercises in standalone context.
return
3. Risk and diversification, Chapter 7 Class At the end of the session, CLO1
Systematic risk and Discussion the student will be able to
unsystematic risk explain how and why
Numerical diversified portfolio
exercises reduces risk.

4. Beta and CAPM Chapter 7 Class At the end of the session, CLO1
discussion the student will be able to
measure systematic risk and
Spreadsheet explain the concept of
exercises CAPM and limitations of
CAPM

Module II: Time Value of Money

5. Introduction to TVM, Chapter 5 Class At the end of the session, CLO1

Time lines, discussion the student will be able to
Compounding and compute PV and FV in
discounting Spreadsheet various situations
exercises

6. FV and PV of multiple cash Class At the end of the session, CLO1

flows, Annuities, Chapter 6 discussion the student will be able to
Perpetuities. estimate PV of perpetual
Spreadsheet stream of cash flows and
exercises PV and FV of annuities

7. Practice Session – Case lets Spreadsheet At the end of the session, CLO1
application of TVM in exercises the student will be able to
financial planning apply the concepts
situations learned in TVM to real
life finance problems
Module III: Long-term Investment Decisions

8. Introduction to capital Chapter 10 Class At the end of the session, CLO2

budgeting Discussion the student will be able to
Case study explain the relevance of
capital budgeting
decisions for a firm and
the ethical dimensions of
it.

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 9. Capital budgeting Chapter 10 Class At the end of the session, CLO2
techniques, NPV, PP, IRR, Discussion the student will be able to
MIRR apply capital budgeting
Numerical techniques
exercises

10. Practice session Case study Peer learning At the end of the session, CLO2
activity the student will be able to
apply the concepts of capital
budgeting

Module IV: Cost of Capital and Long-term Financing Decisions

11. Firm’s overall cost of Chapter 13 Class At the end of the session, CLO2
capital discussion the student will be able to
Case Study explain the concept of
cost of capital

12. Estimating cost of debt, Chapter 13 Class At the end of session, the CLO2
cost of equity and discussion student will be able to
WACC Case Study compute cost of debt, cost
Case study of equity and WACC
related
calculations

13. Capital structure and firm Chapter 16 Class At the end of the session, CLO2
value discussion the student will be able to
explain how capital
structure may influence
firm value

14. Optimal Capital Structure Chapter 16 Spreadsheet At the end of the session, CLO2
exercise the student will be able
compute WACC and firm
value for various levels of
debt-equity ratio

15. Theories of capital Chapter 16 Class At the end of the session, CLO2
structure, trade-off theory, discussion the student will be able to
pecking order theory explain the concepts of
capital structure theories

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Module V: Dividend Decisions

16. Dividends fundamentals, Chapter 17 Class At the end of the session, CLO2
types of dividends, discussion the student will be able
signalling theory of to explain the various
dividends, Stock types of dividends
repurchases
17. Stock dividends and stock Chapter 17 Class At the end of the session, CLO2
splits, dividend policy and Discussions the student will be able
firm value to explain the factors
influencing dividend
policy of a firm

Module VI: Working Capital Management

18. Working capital basics, Chapter 14 Class At the end of the session, CLO3
operating and cash discussion the student will be able to
conversion cycles Numerical calculate operating and
exercises cash conversion cycle of
a firm

19. Working capital Chapter 14 Class At the end of the session, CLO3
investment and financing discussion the student will be able to
strategies, Sources of understand the liquidity-
short-term financing profitability trade-off
involved in working capital
management strategies

20. Ethics in finance Case lets Case analysis At the end of the session, CLO4
the student will be able to
identify the ethical
dilemma involved in
financial decisions

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