FIN 42A - Corporate Finance 1

2017 - 2018

BANKING ACADEMY OF
VIETNAM
FINANCE FACULTY

MODULE HANDBOOK
2017/2018

CORPORATE FINANCE

FIN42A

For ATC programme

Module Lecturer: MSc. Bui Ngoc Phuong

Email: phuongbn@hvnh.edu.vn
Consulting time:
Office Room:
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1. MODULE: CORPORATE FINANCE for ATC programme

2. MODULE CODE: FIN42A
3. POTENTIAL STUDENTS
All formal undergraduates of ATC program are able to study this module.
4. AUTHORITY
Corporate Finance Department – Faculty of Finance
5. PREREQUISITES
Principles of Accounting, Principles of Finance
6. LENGTH OF MODULE
3 credits. In which: 70% lectures and 30% exercises-seminars-midterm tests.
7. MODULE DESCRIPTION
This module is designed to familiarize students with the fundamental concepts and
principles underlying the corporate finance and decisions of the firm. It will develop
analytical frameworks of corporate finance and enable a critical appreciation of the
interaction between financial decision-making and capital market behaviour. Issues
covered will include cash flows of a corporation, Time value of money, Valuation of
financial assets, Financing resources and methods, Effect of dividend policy on firm
value, Effect of capital structure on firm value. In order to achieve these objectives, we
will make use of some algebra and mathematics and the proper understanding of some of
the topics will require investment of some time in the comprehension of a few formulae
used.
8. OBJECTIVES/ LEARNING OUTCOMES
Knowledge
On completion of this module, the successful student will be able to:
1. critically evaluate the relevant concepts and principles of corporate finance with
respect to financing decision-making and working capital management;
2. critically evaluate investments appraisals techniques regarding their merits and
limitations;
3. criticise different theories that impact on valuation, capital structure and dividend
policy;
4. critically assess the advantages and disadvantages of different financing methods.
Skills
On completion of this module, the successful student will be able to:
5. participate in group discussions;
6. forecast the financial performance of a corporation;
7. critically analyse relevant issues;
8. apply the analytical tools of corporate financial and investment analysis in capital
markets.
9. ASSESSMENT
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LEARNING OUTCOMES

- Understanding the nature of corporate finance

- Understanding the principles of corporate financial
Mid-term test 1 (after completing
management
lectures of chapter 1,2,3,4)
- Understanding the important decisions in a
corporation
- Understanding the content of financial statements
and cash flows
- Understanding the methods to evaluate discounted
cashflows in enterprises.
- Understanding  present value and future value in
theory and practice
- Applying investment appraisals to evalutate projects

- Understanding the concepts of interest rates and

bond valuation
Mid-term test 2 (after completing
- Understanding the contents of stock valuation lectures of chapter 5,6,7)
- Analysing and applying the relevant financing
strategy in specific circumstances
- Understanding the relationship between risks and
returns
All learning outcomes are covered in final exam Final exam
Exam Assessment Criteria
Grade D: Students are able to remember basic principles of corporate finance, and use
knowledge to solve some familiar situations. Students has frequent problems in
understanding and inaccuracies in calculation.
Grade C: Students achive D-standards and the basic knowledge of corporate finance,
understand the principles and can use relevant approaches to solve some situations.
Misunderstandings and inaccuracies may occur in some situations.
Grade B: Students get C-standards and have a relatively broad knowledge of corporate
finance including principles and practice. Have ability to apply relevant knowledge to
solve most of financial problems and give solutions. Some mistakes may occur in
unfamiliar situations.
Grade A: Students get B-standards and have a comprehensive knowledge of corporate
finance including principles and practice. Have ability to apply relevant knowledge to
solve financial problems and give deep solutions.
10. ASSESSMENT SCHEME
Your overall assessment will be based on a final unseen examination (60%), an element of
class test (30% in total), and your contribution to class (10%), broken down as follows:
 Two class tests, to be conducted in the lecture, at roughly 1/3 and 2/3 of the
module, each worth 15% of total mark
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 Your contribution to classes, including your ideas, volunteer to present solutions

for teacher’s questions and exercises, etc.,  work 10% of total grade.
In addition to the above, there is an opportunity to obtain “bonus” marks which will be
used to improve your final grade. This is done by volunteering to present the solutions for
the exercises and contribution to the lectures.
11. ACTIVITY ALLOCATION
 135-minute weekly classes  to impart knowledge and define the scope of coverage
for self-study.
 In the total of 16 studying weeks, there are at least 3 classes used for discussion to
explore the application of theory to practice, supplemented with exercise.
 The satisfactory participation in the lectures and seminars are essential for learning.
Total Notional Learning Hours: 36 (equivalent to 3 credits)
 Theories: 50%
 Seminars: 25%
 Self-studying: 25%
12. TEACHING AND LEARNING STRATEGIES
 Lectures, exercises are given by lecturers in class. Seminars will be held to explore
the application of theory to practice and supplemented with exercises.
 Students are expected to read through the lecture notes and learning materials
before the session where they will be covered; revise the concepts/calculations very
shortly after the lecture; submit coursework on time; get learning materials if
required.
13. LEARNING MATERIALS
 Core learning materials:
 Corporate Finance (10th Edition) by Ross, Westerfield, Jaffe. McGraw-
Hill, 2013. ISBN: 978-0-07-803477-0.
 Handouts ad materials (if available) will be provided before classes
 Reference books:
 Principles of Corporate Finance (11 Edition) by Brealey, Myer, Allen.
th

2014. ISBN 978-0-07-803476-3

14. SYLLABUS
Topics Main contents Timing
1 Chapter 1. Introduction to Corporate 1.1. The corporate firm
Finance 1.2. What is corporate finance? 6
1.3. The importance of cash flows
1.4. The goal of financial management
1.5. The agency problem and control of the
corporation
1.6. Regulations

2 Chapter 2. Financial Statements and 2.1. The Balance Sheet

Cash Flow 2.2. The Income Statement 6

3 Chapter 3. Discounted Cash Flow
Valuation
4 Chapter 4. Investment Appraisals
Exercise Solution & Midterm Test 1
5 Chapter 5. Interest Rates and Bond
Valuaion
Chapter 6. Stock Valuation
Chapter 7. Risk and Return
Midterm Test 2 & Review
TOTAL
15. LECTURERS
 Mrs. Nguyen Quynh Tho  (PhD.)
 Phone number: 0989187686
 Email: thonq@hvnh.edu.vn
 Mr. Nguyen Hong Hiep (MFIN)
 Phone number: 0975428258
 Email: hiepnh@hvnh.edu.vn
 Mrs. Bui Ngoc Phuong (MSc.)
 Phone number: 0974598915
 Email: phuongbn@hvnh.edu.vn
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2.3. Taxes
2.4. Net Working Capital
2.5. Financial Cash Flow
2.6. The accounting statement of cash
flow
2.7 Cash Flow Management
3.1. Valuation: The one period case 6
3.2. The multiperiod case
3.3. Compouding periods
3.4. Simplifications
3.5. Loan Amortization
4.1. Net Present Value 6
4.2. The Payback period method
4.3. The discounted payback period
method
4.4. The internal rate of return
4.5. Problems with the IRR approach
4.6. The Profitability Index
3
5.1.Bonds and bond valuation
5.2. Government and Corporate Bonds 6
5.3. Bond Markets
5.4. Inflation and Interest rates
5.5. Determinants of Bond Yields
6.1. The present value of common stock
6.2. Dividends Discount Model 6
6.3. Comparables
6.4. Valuing the entire firm
7.1. Returns
7.2. Average Stock Returns and Risk-free 3
returns
3
45
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16. LECTURE AND SEMINAR SCHEDULE

TOPIC TIMING Readings
Chapter 1
Chapter 1. Introduction to Session 1 + Corporate Finance (10th Edition) by Ross,
Corporate Finance 2 Westerfield, Jaffe. McGraw-Hill, 2013. ISBN: 978-
0-07-803477-0.
Chapter 2
Chapter 2. Financial Session 3 + Corporate Finance (10th Edition) by Ross,
Statements and Cash Flow 4 Westerfield, Jaffe. McGraw-Hill, 2013. ISBN: 978-
0-07-803477-0.
Chapter 4
Chapter 3. Discounted Session 5 + Corporate Finance (10th Edition) by Ross,
Cash Flow Valuation 6 Westerfield, Jaffe. McGraw-Hill, 2013. ISBN: 978-
0-07-803477-0.
Chapter  5 + 6
Chapter 4. Investment Session 7 + Corporate Finance (10th Edition) by Ross,
Appraisal 8 Westerfield, Jaffe. McGraw-Hill, 2013. ISBN: 978-
0-07-803477-0.
MID-TERM TEST 1 Session 9
Chapter 8
Chapter 5. Interest Rates Corporate Finance (10th Edition) by Ross,
Session 10
and Bond Valuation Westerfield, Jaffe. McGraw-Hill, 2013. ISBN: 978-0-
07-803477-0.
Chapter 9
Chapter 6. Stock Session 11 Corporate Finance (10th Edition) by Ross,
Valuation + 12 Westerfield, Jaffe. McGraw-Hill, 2013. ISBN: 978-0-
07-803477-0.
Chapter 10 + 11
Chapter 7. Risk and Session 13+ Corporate Finance (10th Edition) by Ross,
Return 14 Westerfield, Jaffe. McGraw-Hill, 2013. ISBN: 978-
0-07-803477-0.
MID-TERM TEST 2 Session 15
Revision Session 16