COURSE OUTLINE

Class: MBA Executive Semester: Fall

Course Name: Business Finance 1 Session: Tuesday and Thursday

Class Timing: 6:30pm to 8:30pm Instructor Name: Shazia Farooq, CFA

Contact Email: shzfarooq@gmail.com Consultation Time: 5:30 to 6:30 pm

Text Book

Most of the relevant material will be covered in lecture notes. However, for further reference, students
will be provided with the excerpts from the CFA curriculum. Moreover, students are also advised to
look up the following titles for a detailed theoretical understanding of the concepts and their numeric
applications:

a) Fundamentals of Financial Management by Eugene F. Brigham & Joel F. Houston;

b) Fundamentals of Corporate Finance by Brealey, Myers & Marcus;
c) Principles of Corporate Finance by Brealey, Myers & Allen;

Course Objective

Inculcating timely decision making skills

Prime focus of the course would be on the following areas:

a) Present value and opportunity cost of capital;

b) Valuation of fixed income securities;
c) Valuation of stocks;
d) Project cash flow analysis;
e) Capital budgeting techniques;
f) Determination of the required rate of return via asset pricing models;
g) Working Capital Management;
h) Financial Planning and Forecasting Statements; and
i) Introduction to financial risk management and derivatives.
Summarized Week Wise Course Distribution (Tentative)

Session Topic To Be Studied

1-2 Overview of Financial Management
Importance and Analysis of Financial Statements
3-5 Basics of Valuation – Time Value of Money
6-9 Risk and Return for Individual Stocks and Risk diversification for
portfolios; Optimal portfolio and Efficient Frontier (Two-asset case);
CAPM Model; Beta Coefficient
10-11 Cost of Capital: Component Costs (Debt, Preferred Stock, Retained
Earnings, New Common Equity)
Short Case Study
11 Features of Equity Securities and Overview of Valuation Techniques
12-14 Valuation of Stocks
Short Case Study
15 Guest Speaker Session
16-18 Term structure of Interest rate
Valuation of Fixed-Income Securities
Case Study on Fixed Income Securities: Engro Rupiya
19-21 Project Cashflows and Basics of Capital Budgeting Techniques
Payback, Discounted payback, NPV, and IRR
Short Case Study
21-23 Working Capital Management
24-25 Financial Planning and Forecasting Financial Statements
26 Financial Risk Management: Introduction to Derivatives
27-28 Revision/Project Presentations

Grading Plan
Marks Distribution Weightage
Mid Term1 15%
Mid Term2 15%
Final Examination 40%
Quizzes 15%
Assignments/Projects/Presentations 15%
Total 100%

Project Guidelines
Analyse financial performance of a listed company for the period 2014-17 and comment on the
following key financial indicators:
 Liquidity, Solvency, Efficiency and Profitability position using key financial ratios
 Working Capital Management Policy
 Weighted Average Cost of Capital at year ending 2017
 FCFF, FCFE and Dividend trends
 Beta (using 36 months data for monthly prices) and cost of equity (using CAPM)

Required Submission Format: Excel Workbook with complete data and working, analysis (on a
separate MS Word document) and names of group members.

Due Date: 03 December 2018