NORTH SOUTH UNIVERSITY

COURSE OUTLINE
EMBA-660
CORPORATE FINANCE FALL 2014

SCHOOL OF BUSINESS
INSTRUCTOR: JUNAID KHAN

CLASS ROOM: SEC 01 NAC 992

CLASS HOURS: FRIDAYS 9AM-12:30PM
OFFICE ROOM: NAC 738 OFFICE HOURS: SUN & TUE 7:30am-8am, 11:10AMNOON, Friday by Appointments@ Ph 885-2000, Ext 1709; 0171 556
3100; junaid@northsouth.edu; junaid.nsu993@gmail.com
COURSE OBJECTIVE:
Corporate Finance focuses on how companies invest in real assets and
how they raise the funds to finance these investments.
Financial
management is therefore planning for, acquiring, and utilizing funds
to maximize the value of the firm efficiently and effectively.
Corporate finance decisions determine successes and failures today
and tomorrow for companies in manufacturing and/or service sectors
irrespective of their sizes.
Students will be asked to demonstrate their potentials in financial
decision-making on the basis of managerial tools used in the modern
global business.
Classroom exercise will depict the need for
financial computations, analysis and interpretations alongside
practical examples. Students are required to read the chapter to be
discussed before attending classes. Students are advised to complete
all the end-of-the-chapter problems concurrent to class lectures in
order to keep a good performance in the class and more importantly
learn the concepts.
Topics to be covered include:
PART I INTRODUCTION TO FINANCIAL MANAGEMENT:
1. PRINCIPLES OF FINANCE
CHAP 01 KMT
CHAP 01 KMPS
2. FIRMS AND THE FINANCIAL MARKETS CHAP 02 KMT
CHAP 14 KMPS
3. UNDERSTANDING FINANCIAL STATEMENTS
CHAP 03 KMT
CHAP 03 KMPS
4. FINANCIAL STATEMENT ANALYSIS
CHAP 04 KMT
CHAP 03 KMPS
5. FINANCIAL FORECASTING & PLANNING CHAP 17 KMT
CHAP 04 KMPS
6.
WORKING CAPITAL MANAGEMENT
CHAP 18 KMT & KMPS (READING)
PART II: VALUATION OF FINANCIAL ASSETS
7. TIME VALUE OF MONEY THE BASICS CHAP 05&06 KMT CHAP 05 KMPS
8. INTRODUCTION TO RISK AND RETURN CHAP 07&08 KMT CHAP 06 KMPS
9. DEBT (& BOND) VALUATION
CHAP 09 KMT
CHAP 07 KMPS
10. STOCK VALUATION
CHAP 10 KMT
CHAP 10 KMPS
MIDTERM I
PART
11.
12.
13.
14.

III: CAPITAL BUDGETING

INVESTMTENT DECISION CRITERIA
ANALYZING PROJECT CASH FLOWS
RISK ANALYSIS & PROJECT EVALUATION
THE COST OF CAPITAL

CHAP
CHAP
CHAP
CHAP

11
12
13
14

KMT
KMT
KMT
KMT

CHAP
CHAP
CHAP
CHAP

09
10
11
12

KMPS
KMPS
KMPS
KMPS

PART IV: CAPITAL STRUCTURE & DIVIDEND POLICY

15. CAPITAL STRUCTURE POLICY
CHAP 15 KMT
CHAP 16 KMPS
16. DIVIDEND POLICY
CHAP 16 KMT
CHAP 17 KMPS
MIDTERM II
17.

ANALYSIS AND IMPACT OF LEVERAGE

CHAP 15 KMPS

NORTH SOUTH UNIVERSITY

COURSE OUTLINE
EMBA-660
CORPORATE FINANCE FALL 2014

18.
19.
20.

CORPORATE RISK MANAGEMENT

CORPORATE RESTRUCTURING
TERM LOANS AND LEASES

CHAP 20

SCHOOL OF BUSINESS
INSTRUCTOR: JUNAID KHAN

CHAP 21 KMPS (READING)

CHAP 23 KMPS
CHAP 24 KMPS FINAL EXAM

IMPORTANT:
This plan is subject to change at any point in time.
Please come to class having read the chapter to be discussed and
having done the previous chapters end-of-the-chapter questions and
problems. Chapters marked for reading must be read at students own
responsibility.
ASSIGNMENTS: Each student is required to perform different financial
analysis based assignments individually &/or in groups.
This will
also include a (preferably) Bangladeshi publicly traded company or a
foreign (web downloaded company) within groups and develop industry
ratios with the group and submit an industry report.
Please see
attached guidelines and list for further details. Please feel free
to ask for any clarifications.
COURSE PRE-REQUISITES:
FIN 254, ACT 201, ACT 202, BUS 172, and MIS
105. It is strongly suggested to thoroughly revise FIN 254 material.
REQUIRED TEXTs:
(1) Financial Management, 11/e, 2011, Sheridan
Titman, Arthur J. Keown, & John D. Martin, Pearson-Prentice-Hall.
(KMT)
(02) Financial Management, 10/e, 2005 Arthur J. Keown, John
D. Martin, J. William Petty, & David F. Scott, Jr., Pearson-PrenticeHall. (KMPS)
RECOMMENDED READING: (please use the latest edition)
* Financial Management, Ross, Westerfield & Jordan, 8th Edition 09-10
* Essentials of Managerial Finance, 12th edition, Scott Beseley &
Eugene F. Brigham, Dryden Press, 2000, (or latest).
* Financial Decision Making, 4th edition, John J. Hampton, Prentice
Hall Inc., (or latest).
* Principles of Managerial Finance, 9th edition, Lawrence J. Gitman,
Addis Wesley Longman LTD, (or latest).
* CORPORATE FINANCE, Ross, Westerfield & Jaffe, 7th Edition Mar
2004, (or latest).
* FUNDAMENTALS OF CORPORATE FINANCE, Brealey, Myers and Marcus, 4th
Ed, International Edition, 2004, Irwin McGraw-Hill, (or latest).
* Intermediate Financial Management, 7th Ed, Eugene F Brigham &
Phillip R Daves, Southwestern/Thomson Learning, 2002, (or latest).
* James C Van Horne and J M Wachowicz, Jr., Fundamentals of
Financial Management, latest edition, Prentice Hall.
* Eugene F Brigham (Univ. of Florida), Fundamentals of Financial
Management, Latest Edition. The Dryden Press Harcourt Bradce
College Publishers.
COURSE GRADING:
Grades will be assigned as per NSU grading policy (e.g., A@93, A@90+, B-@80+, C-@70+, D@60+, etc).
There will be a 5% marks
deduction each for spelling and grammatical mistakes in all

NORTH SOUTH UNIVERSITY

COURSE OUTLINE
EMBA-660
CORPORATE FINANCE FALL 2014

evaluations.
criteria:

SCHOOL OF BUSINESS
INSTRUCTOR: JUNAID KHAN

Your course grade will be based on the following weight

Class Attendance & Participation:

5%
Quizzes
15%
Assignments/ Group Reports:
20%
Mid-Term I Exam:
20%
Mid-Term II Exam:
20%
Final Exam:
20%
Total
100%
(These criteria are subject to change depending on class progress)
Exams will consist of multiple choice, true/false, short questions
and/or problems depending on the nature of class lectures. Students
are urged to document the class lectures without discontinuation.
Make-up exams are not permissible, but may (RARELY) be considered
by the instructor on the basis of documented illness or emergency
situation. No make-up quizzes.
Selected problems and questions from the text will be reviewed in
class.
However, the student is solely responsible for undertaking
all assigned (end-of-the-chapter) problems and questions.
Please
strive to get clarifications as much as necessary, in and out of
class. Class participation is highly encouraged for learning.
ALL
of the above are subject to change
Class participation is the best way of learning. Punctuality is of essence! Ethical
and professional conduct at every step of the way is of pinnacle importance.
For those who may be interested, some more references:
1. Aswath Damodaran, INVESTMENT VALUATION: SECOND EDITION
2. Grinblatt & Minus; Titman: Financial Markets and Corporate
Strategy, Second Edition (OR LATEST EDITION) The McGraw Hill
Companies, 2002
3. Principles of Corporate Finance, 10/e, Richard A. Brealey, London
Business School; Stewart C. Myers, Massachusetts Institute of
Technology; Franklin Allen, University of Pennsylvania
ISBN: 0073530735; Copyright year: 2011
4. Business Valuation Demystified, 1st Edition, Edward Nelling,
DREXEL UNIVERSITY, Softcover, 288 pages, (c)2011, ISBN-13
9780071702744, MHID0071702741
5. MERGERS & ACQUISITIONS FROM ATOZ, 2nd Edition, Andrew J. Sherman
and Milledge A. Hart, American Management Association

NORTH SOUTH UNIVERSITY

COURSE OUTLINE
EMBA-660
CORPORATE FINANCE FALL 2014

SCHOOL OF BUSINESS
INSTRUCTOR: JUNAID KHAN

IMPORTANT DATES & DEADLINES: EMBA 660 SEC 01: JK

(ON/BEFORE 10AM)
1.
SEP 19:
FRIDAY
9:00AM-12:30PM:
01.REGULAR CLASS
2.
SEP 25:
THURSDAY 6:30PM-10:30PM:
02.EXTRA/MAKE-UP CLASS
3.
SEP 26:
FRIDAY
9:00AM-12:30PM:
03.GROUP REGISTRATION
4.
OCT 02:
THURSDAY 6:30PM-10:30PM:
04.EXTRA/MAKE-UP CLASS
5.
OCT 10:
FRIDAY
9:00AM-12:30PM:
05.ASMNT#1 DUE (HAWKER/
RICKSHAW/STORE)
6.
OCT 16:
THURSDAY 6:30PM-10:30PM:
06.EXTRA/MAKE-UP CLASS
7.
OCT 17:
FRIDAY
9:00AM-12:30PM:
07.MID TERM I EXAM
8.
OCT 23:
THURSDAY 6:30PM-10:30PM:
08.EXTRA/MAKE-UP CLASS
9.
OCT 24:
FRIDAY
9:00AM-12:30PM:
09.ASMNT#2 DUE BALANCE
SHEET STATUS
10. OCT 30:
THURSDAY 6:30PM-10:30PM:
EXTRA CLASS CANCELLED
11. OCT 31:
FRIDAY
9:00AM-12:30PM:
REGULAR CLASS CANCELLED
12. NOV 06:
THURSDAY 6:30PM-10:30PM:
EXTRA CLASS CANCELLED
13. NOV 07:
FRIDAY
9:00AM-12:30PM:
REGULAR CLASS CANCELLED
14. NOV 13:
THURSDAY 6:30PM-10:30PM:
10.EXTRA/MAKE-UP CLASS
15. NOV 14:
FRIDAY
9:00AM-12:30PM:
11.REGULAR CLASS
16. NOV 20:
THURSDAY 6:30PM-10:30PM:
12.EXTRA/MAKE-UP CLASS
17. NOV 21:
FRIDAY
9:00AM-12:30PM:
13.MID TERM II EXAM
18. NOV 27:
THURSDAY 6:30PM-10:30PM:
14.EXTRA/MAKE-UP CLASS
19. NOV 28:
FRIDAY
9:00AM-12:30PM:
15.REGULAR CLASS
20. DEC 05:
FRIDAY
9:00AM-12:30PM:
16.FINALLY LAST CLASS
21. .
OTHER ASSIGNMENTS TO FOLLOW.
PLEASE FOLLOW THE SIMPLE GUIDELINES BELOW FOR PREPARING AND SUBMITTING ALL
YOUR ASSIGNMENTS AND REPORTS.
A. PLEASE MENTION ONLY THE FOLLOWING:
1. COURSE AND SECTION NO.: __________
2. SEMESTER:
__________
3. DATE OF SUBMISSION:
__________
4. ID #:
__________
5. ASSIGNMENT #:
__________
6. HEADING:
__________
B. PLEASE MAKE SURE YOU SPELL CHECK AND GRAMMAR CHECK YOUR ASSIGNMENTS/
REPORTS BEFORE SUBMISSION TO AVOID PENALTIES. PLEASE FORMAT YOUR EXCEL
SHEETS WITH APPROPRIATE 0, 2 OR 4 DECIMALS AND INCLUDE UNITS.
C. THERE IS NO NEED FOR A TITLE PAGE OR COVER PAGE.
YOU MAY
IDENTIFY/PROVIDE ABOVE INFORMATION ON THE MAIN ASSIGNMENT.
D. THERE IS NO NEED FOR COLOR PRINTING.
E. DO NOT MENTION YOUR NAME ANYWHERE IN THE ASSIGNMENTS, REPORT, QUIZZES,
OR EXAMS. NAMES ARE AN AUTOMATIC ZERO. ID NUMBER IS SUFFICIENT.
F. 12 SIZE FONT, 1.5 SPACING FOR ASSIGNMENTS.

(Anyone can drop off assignments at my office students dont have to come in person).

GROUP FIELD ASSIGNMENT 01: SMALL BUSINESS FINANCIAL SURVEY

Form groups of maximum four members. Group Registration: By 10AM
FRIDAY, SEP 26, 2014
Assignment # 01

Due 10AM, FRIDAY, OCT 10, 2014 (GROUP):

Each member will interview a small businessman (preferably a

neighborhood general store) or street vendor, OR A RICKSHAW Puller OR
a CNG Driver on how they finance their business (or operate their
services on a rental basis).
Four members will interview four

NORTH SOUTH UNIVERSITY

COURSE OUTLINE
EMBA-660
CORPORATE FINANCE FALL 2014

SCHOOL OF BUSINESS
INSTRUCTOR: JUNAID KHAN

stores/vendors/ pullers, but in the same category, i.e., if fish

hawker, then all four members will interview FOUR fish hawkers. Then
they will collate their information and write one report.
Suggested information collection may include where appropriate but
not limited to:
1.
How long is he/she in business/pulling/driving?
2.
How much funds did they start with? Their investment today?
Or how much does he need to
3.
Equity or debt funds?
4.
Repayments or Daily rentals and terms?
5.
Interest rates?
6.
How do they carry out their business/trade? E.g.,
a. What time do they start?
b. How much cash do they invest in the morning and how much
cash do they carry with them? Why?
c. Where do they sell/ply? Why?
d. How do they price/charge their goods/services?
e. How long does it take them to recover their cash or daily
rentals?
7.
What are the risks they face?
a. Business risks
b. Political risks
c. Mastaans / criminals
d. Others
8.
Expenses in carrying out their business/services? (Least,
most, and averages)
a. Business/service expenses daily or weekly or periodic.
b. Personal expenses - daily or weekly or periodic in
carrying out the business/services.
9.
Earnings net income daily or weekly or periodic. Least,
most, average, losses?
10. Can they increase their business/services? How? What would
they need?
11. Is it their only business/service?
Is it enough to support
them? Throughout the year?
Collect the above information and write a (maximum) 5-page report
12 font. Include an executive summary, tabulate data collected, and
your analysis all from finance perspective.
Purpose is to learn
real life micro-level financial management.
Assignment # 01 Due 10AM, FRIDAY, OCT 10, 2014
GROUP ASSIGNMENT # 02: BALANCE SHEET STATUS Due 10AM, FRIDAY, OCT 24,
2014
List THREE global, THREE MNCs operating in Bangladesh and THREE
domestic companies (preferably in the same industry and excluding

NORTH SOUTH UNIVERSITY

COURSE OUTLINE
EMBA-660
CORPORATE FINANCE FALL 2014

SCHOOL OF BUSINESS
INSTRUCTOR: JUNAID KHAN

banks and NBFIs) according to their latest(1) cash + marketable

securities; and (2) interest bearing short-term & long-term debts.
Suggested information to include (in tabular format): Company Name;
balance sheet date; Total Assets; Total Cash + Marketable Securities;
Percentage of Cash+M/S of Total Assets; Total (interest bearing)
short-term debt; Total (interest bearing) long-term debt; Total
(interest bearing) short+long-term debt; Total (interest bearing)
debt to Total Debt; Total (interest bearing) debt to Total Assets;
Current market price of common stock, total market value of equity;
total (book value of interest bearing) debt + market value of equity;
total % of (book value of interest bearing) debt to total (book value
of interest bearing) debt + market value of equity; any other
relevant information.
Also show averages of each group, and compare the groups.
Purpose is to study the contemporary use of interest bearing debt.
TOTAL THREE PRINTED PAGES.
Assignment # 2 Due 10AM, FRIDAY, OCT 24, 2014
GROUP ASSIGNMENT # 03: COMPANY VALUATION Due 10AM, FRIDAY, DEC 05,
2014:
Each
group
will
select
an
industry
(excluding
the
textile
and
pharmaceuticals industries).
The group will decide the (3-year) timeperiod of study (within 2009-2013).
Each member will select a different
company in the same industry, but same time-period.
Each member will
determine the total company value and its real stock price.
Please

explain and show how you calculate these values. Then the group will
make an industry comparison. OR Each member their ratios, etc
independently, BUT group leader will ensure that the formats of each member
are the same.
You can use the following questions in the assignment to
develop your assignment.

01.
02.
03.
04.
05.
06.
07.
08.
09.
10.
11.
12.
13.

What are the NWC & CCC of the company? What are the NWC & CCC
of the industry?
What are the GROSS PM, NET PM, ROA, ROE, of the company? What
are the FATOR & TATOR of the industry?
What is the WACC of the company?
What is the WACC of the
industry? What should be the companys optimum WACC?
What is the D/E Ratio of the company? What is the D/E Ratio of
the industry?
What is the Dividend POR of the company? What is your suggested
dividend policy for the company?
What is the P/E Ratio of the company? Please show market prices.
What is the total book value of equity?
What is the total book value of debt?
What is the total book value of the company?
What is the market value of its (total interest bearing) debt?
What is the market value of its equity?
What is the fair/market value of the total company?
What is the true value of the company?

NORTH SOUTH UNIVERSITY

COURSE OUTLINE
EMBA-660
CORPORATE FINANCE FALL 2014

SCHOOL OF BUSINESS
INSTRUCTOR: JUNAID KHAN

14. Are all these prices the same? Why/ Why not?
(Please see attached general guidelines for further hints)
Total 10 printed pages.
Assignment # 3 Due 10AM, SUNDAY, AUG 03, 2014
EMBA 660 COMPANY VALUATION ASSIGNMENT
General Guidelines
Form Groups:
Form groups of (maximum) four.
Each group will select a
group leader.
Each group will select an industry (excluding the textile
and pharmaceuticals industries). The group will decide the (3-year) timeperiod of study (within 2009-2013).
Each member will select a different
company in the same industry, but same time-period. Each member will then
develop their ratios, etc independently, BUT group leader will ensure that
the formats of each member are the same.
You should and can do the
following for your analyses:
But use the questions in the assignment to
develop your assignment.
1.
2.
3.
4.
5.
6.
7.

8.
9.
10.
11.
12.
13.
14.

For format, use standard Accounting Balance Sheet, Income Statement,

and Cash Flow Statements, i.e., Operations, Investment, and Financials.
Ratio Analysis use Standard ratio calculations as listed in power
points.
Analysis: Averages, standard deviations, and growth rates.
Major insights gained; e.g., identify (financial) problems.
Later it
will help identify reasons for problems (apparent and underlying),
strategies/ suggestions/ solutions.
Do it separately for liquidity (including Cash Conversion Cycle etc.),
efficiency,
debt-management,
profitability,
and
market
valuation
ratios.
You can calculate and analyze risk based on returns over the period
variance, standard deviation, and coefficient of variance.
You can calculate market returns for the period and the forecasted
year.
You can use market return for the companys stock price and
market return of the index
during the same period.
Calculate risk
free returns for T-bills (28 days). Calculate Beta for the
company.
Calculate return for the company.
You can also use historical returnsROA, and calculate standard
deviations to calculate risk for your sample data.
Calculate interest and other cost of financing of debt for the company
before and after taxes. Use (all) financial expenses and (interestbearing) debt.
Calculate Weighted Average Cost of capital for the firm. Analyze these.
Forecast next years I/S and B/S.
What are the investment
requirements? How will these be financed?
Calculate optimum debt ratios for the company. Analyze the situation.
Analyze to see if stock prices reflect true market values.
What should be the companys dividend policy?