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Syllabus-Corporate Finance

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  • Syllabus-Corporate Finance

    Corporate Finance: Corporate finance is the field of finance dealing with financial decisions that business enterprise make and the tools and analysis used to make these decisions. The primary goal of corporate finance is to maximize corporate value while managing the firm’s financial risks. Although it is in principle different from managerial finance which studies the financial decisions of all firms, rather than corporations alone, the main concepts in the study of corporate finance are applicable to the financial problems of all kinds of firms. The discipline can be divided into long-term and short-term decisions and techniques. Capital investment decisions are long-term choices about which projects receive investment, whether to finance that investment with equity or debt, and when or whether to pay dividends to shareholders. On the other hand, short term decisions deal with the short-term balance of .current assets and current liabilities; the focus here is on managing cash, inventories, and short-term borrowing and lending. Corporate finance covers every decision a firm makes that may affect its finances which can be grouped into following area for the conceptual understanding.
    1. The financial environment:
      1. Business environment
      2. Role of a financial Manager
      3. Firm financial statements
    1. Project evaluation:
      1. Present value and future value,
      2. Net Present value and wealth creation,
      3. other investment criterion
      4. Estimation of Project cash flows
    1. Portfolio and capital budgeting decisions:
      1. Diversification and its benefits
      2. Risk and return
      3. optimal capital budget
      4. Hedging Macroeconomic Risk
    1. Long Term Financing:
      1. Long term debt
      2. Equity financing
      3. Benefits of going public
    1. Capital structure and dividend policy
      1. Capital structure relevance
      2. Capital structure in perfect market
      3. Capital structure in imperfect market
      4. Role of dividend policy
    1. Financial Planning:
      1. Long-term planning
      2. Short term planning
    1. Short term financial management:
      1. Management of cash
      2. Management of receivables
      3. Management of inventory
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