BRAC BUSINESS SCHOOL

BBA Program
Course Outline for SPRING 2016

[“Tell me and I forget, teach me and I may remember, involve me and I learn.”]
― Benjamin Franklin

Course Title: CORPORATE FINANCE I (FIN 421) Section: 01 & 02

Instructor: Riyashad Ahmed

Assistant Professor of Finance &
Executive MBA (EMBA) Program Coordinator
BBS, BRACU.

Consulting Hours:
Day Time
Sunday 11.00 AM – 12.30 PM
Monday 2.00 PM – 5.00 PM
Tuesday DAY OFF
Wednesday 2.00 PM – 5.00 PM
Thursday 3.00 PM – 6.30 PM
Friday 10.00 AM – 12.30 PM
Saturday 2.00 PM – 3.30 PM
Class Schedule:

Section Day Time Venue

001 MW 3.30 PM – 04.50 PM UB 20202
002 MW 5.00 PM – 6.20 PM UB 20202

Office Room: UB 20710

E-mail: riyashad@bracu.ac.bd

Course Objectives

This is the first course of corporate finance in the BBA Program and the objective of this
course is to teach the student how to apply modern financial theory to the investment and
financing decisions of a corporation.

Riyashad Ahmed, Assistant Professor, BRAC Business School. Page 1

Course Content

This course is designed for finance majors who are interested in careers in corporate
finance as members of the finance departments of an industrial corporation or the
corporate finance group of an investment bank. The course extends the core theory
introduced in Financial Analysis by emphasizing its practical applications to the strategic
financial decision areas of a firm. The overall goal is to obtain a comprehensive and in-
depth perspective of the area of Corporate Finance. Major topics include financial analysis
and planning, valuation, capital budgeting, capital structure, dividend policy, and risk
management. Special emphasis is given on integration of the concepts of financial
management into a total systems approach to business decision-making. 

Learning Outcomes

Upon successful completion of this course, students are expected to learn about:

 Investment decisions – what project to invest in, its cash flows and/how to value a
firm or an asset
 Financing & capital structure decision -- how to raise capital in the financial markets;
what would be the capital structure and the cost of capital
 corporate payout decision – why and how to return cash to investors;

Course Texts

Core Textbook:

“Financial Management: Principles and Applications”, Keown, Arthur J, Martin, John

D., Petty, William J., Scott, David F. Pearson Prentice Hall, 10Th Edition.

Supplementary References:

 Eugene F. Brigham, Joel F. Houston; “Fundamentals of Financial Management”,

10th Edition, Thomson, South-Western publishers.

 “Managerial Finance” by Lawrence J. Gitman, 11th Edition, Pearson Education

 “Fundamentals of Corporate Finance”, Ross, Westerfield & Jordan, 8th Edition,

McGraw-Hill.

Riyashad Ahmed, Assistant Professor, BRAC Business School. Page 2

Exams & Grading Policy

Exams will contain multiple choices, short theoretical questions, cases and problems
solving. The date for each examination will be announced one week before the exam.
There is absolutely no provision for make-up quizzes. Make-up exams can be arranged
only in exceptional circumstances with adequate proof. The format and the difficulty level
of the makeup midterm will be much harder than the regular exam. BBS rules will be
applied regarding using unfair and unethical means (including cheating, plagiarism) in the
exams, quizzes and assignments. Cell phones must be switched off during exams.
Following grading scale will be strictly followed:

Marks (%) Grades

90% and above A
85 - 89.99 A-
80 – 84.99 B+
75 – 79.99 B
70 – 74.99 B-
65 – 69.99 C+
60 – 64.99 C
57 – 59.99 C-
55 – 56.99 D+
52 – 54.99 D
50 – 51.99 D-
Less than 50 F

Marks Allocation

Class attendance……………….5%
Quizzes……………………….. 10%
Case Analysis…………………..5%
Term Project…………………...15%
Presentation……………………..5%
Mid-term...……………………...20%
Final Exam……………………..40%
Total 100%

Riyashad Ahmed, Assistant Professor, BRAC Business School. Page 3

Teaching Strategies

Class Attendance

Student attendance is absolutely mandatory as exams will be based on the materials

covered in the class. Attendance will be taken in each lecture session which will contribute
to the 5% of your total grade. Please turn off your cell phone before the class starts. You
are strongly encouraged to actively participate in class discussion. It is absolutely
prohibited to attend classes in a particular section while being registered in another section
of this course.

Quizzes

All quizzes will be announced. There will be a total of 4 quizzes. The best 3 will be used for
grading purpose.

Case Analysis

There will be a number of group assignments / group case studies to be completed during
the term which will be graded under this category.

Term Paper

There will be a group term paper needs to be completed. Each group (consisting of 4 to 5
members) has to submit the term paper in due time. The topic of term paper, formation of
group and the detail guideline for the completion of term paper will be discussed
thoroughly in the class. You have to present your term paper at the end of the term with
your entire group members.

Mid-term Examination

The mid-term examination will include descriptive questions, MCQ, short notes and
problem solving. This examination will test your knowledge of materials discussed in class
and the readings until the time of the mid-term examination. The precise format and the
marks distribution in the different sections of mid-term exam will be discussed in the class
on advance.

Final Examination

As per the university rule, the final exam will be comprehensive in nature. The exam will
have both descriptive and problem solving parts which will be integrated in nature and will
test your overall understanding of the concepts of finance that you have learned in the
entire term. The precise format and the marks distribution in the different sections of final
exam will be discussed in the class on advance as well.

Riyashad Ahmed, Assistant Professor, BRAC Business School. Page 4

Academic Integrity

Each student in this course is expected to abide by the BRAC University Code of
Academic Integrity. Any work submitted by a student in this course for academic credit
must be the student's own work. If copying occurs, both the student who copied work from
another student and the student who gave material to be copied will both automatically
receive a zero for the assignment. Penalty for violation of this Code can also be extended
to include failure of the course and University disciplinary action. The same rules and
regulations are also applicable in the Mid-Terms and Final examinations. Cell phones are
absolutely prohibited in exam sessions.

Course Contents & Tentative Class Schedule

Lecture Weeks Lecture Topic Assigned Readings

No
1 Week 1 Introduction with students and in-detail
discussion of course outline
Review of financial statements and annual Chap 2:
2 reports – balance sheet, income statement, Understanding
Week 2 cash flow and owners’ equity statements, Financial Statements,
accounting income vs. cash flow. Taxes, and Cash
3 Flows
4 Five major types of ratio analysis, du-pont Chap 3: Evaluating a
5 Week 3 and extended du-pont equation, common-size Firm’s Financial
statements, cross sectional and trend analysis Performance
6 Concept of Beta, SML, CAPM, risk-return Chap 6: Risk & Rate
7 Week 4 definition, relationship and their types, of Return
portfolio return and risk.
8 Definitions and concepts of discounting, Chap 5: The Time
9 Week 5 compounding, present and future value, Value of Money
perpetuity, annuity, loan amortization.
10 Different types of bonds, valuation of bonds, Chap 7: Bonds
11 Week 6 Yield to maturity, yield to call, current yield, Characteristics and
term structure of interest rate, fisher-effect. Their Valuation
Mid-term
(Date, Time & Venue will be announced in the class)
13 Different types of stocks, stock market Chap 8: Stocks and
transactions and their valuation methods, Their Valuation
Week 7 constant growth, non-constant growth and
14 corporate valuation model, efficient market
hypothesis.
15 Definition, calculation of cost of different Chap 12: Cost of

Riyashad Ahmed, Assistant Professor, BRAC Business School. Page 5

 16 Week 8 capital components, WACC, divisional cost of Capital
capital and their associated risks.

Lecture Weeks Lecture Topic Assigned Readings

No
17 Project classifications, NPV, IRR, MIRR, PI, Chap 9: Capital
Week 9 payback period, NPV profile, decision criteria Budgeting Decision
18
in each of the techniques. Criteria
19 Incremental Cash Flows, estimating project Chap 10: Cash
Week cash flows, lease vs. buy or replacement Flows & Other Topics
20 10 decision. in Capital Budgeting

Dividend payout ratio, three views of dividend

21 Week policy, residual dividend theory, alternative Chap 17: Dividend
11 dividend payment procedures, dividend Policy
22 reinvestment plans, stock dividend vs. stock
split.
23
Week REVIEW CLASS
24 12

Comprehensive Final Exam

Note: The instructor reserves the right to make changes to the syllabus if necessary.

Riyashad Ahmed, Assistant Professor, BRAC Business School. Page 6

 ** Good Luck and Have a Wonderful FALL 2015 Term**

Riyashad Ahmed, Assistant Professor, BRAC Business School. Page 7