Corporate Finance

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Course Name : Corporate Finance iii.

Money market Preferred


Course Code : FIN504 Stock (MMP)
Semester : 5th
Credit Hours : 03 Week – 7, 8, 9:
Total Weeks : 16/18 Management of Dividend:
Total Hours : 48/54  Basic concept of dividend.
Total Marks : 100  Cash dividend payment
procedure.
Week –1, 2:  Factors influencing dividend
Introduction to Corporate Finance and policy.
corporation  Dividend policy theories.
 Basic Concept of corporate Finance.  The residual theory of
 Important Financial Management dividend.
Decisions.  Dividend irrelevance
 Difference among Cash, Fund & theory arguments.
Finance (Assignment).  Dividend relevance
theory arguments.
Week – 3 & 4:
Management of Common Stock:  Types of dividend
 Concept of Capital Stock and aspect policies.
of ownership in common stock.  Constant-payout-ratio
 Par value & no par value concept of dividend policy.
C/stock.  Regular dividend policy
 Difference among authorized, issued  Low-regular and extra
& outstanding shares. dividend policy.
 Classes of common stock.
 Right of common Stockholders. Week –10,11:
 Distribution of earning & assets Investment Banking.
rights.  Basic concept of Investment
 Preemptive Rights banking.
 Functions of the investment
 Voting Rights.
banker.
 Other Rights.
i. Underwriting.
 Voting Rights. ii. Private Placement.
1. Majority Voting System. iii. Best Efforts Basis.
2. Cumulative Voting System. iv. Advising.
 Importance of Proxy Voting.  Organization of Investment
 Selling Common Stock Baking Activity.
 Advantages & Disadvantages of  Cost of Investment banking
Common Stock. Services.

Week – 5, 6: Week – 12,13:


Management of Preferred Stock: Leverage.
 Introduction of preferred Stock.  Basic Concept of Leverage.
 Concept of Par Value and no Par  Operating Leverage.
Value Preferred Stock.  Calculation of DOL.
 Basic Rights of Preferred  Breakeven analysis.
Stockholders. Algebraic Approach & Graphical
 Distribution of assets, Presentation.
earnings and voting right ( in  Financial Leverage.
special situation)  Calculation of DFL.
Features of Preferred: Stock.  Total Leverage.
i. Restrictive covenants. Calculation of DTL
ii. Cumulation
iii. Participation.
iv. Call Feature.
v. Conversion Feature. Week – 14, 15:
Special Types of Preferred Stock: Merger Fundamentals.
i. Adjustable rate Preferred  Basic Concept of Corporate
Stock. (ARPs) Restructuring Merger and
ii. Payment in kind Preferred Consolidation
Stock. (PIK)  Basic Merger Concepts.
 Acquiring Versus Target
Companies
 Friendly vs. Hostile
Takeovers
 Strategic vs. Financial
Merger
 Motives for Merger
 Types of Merger
 Merger Process
 Leveraged Buyouts
(LBO)
Week – 16
Management of Inventory.
Meaning and Types of Inventory.
 ABC system
 EOQ modle – The reorder point
 Just in time system
 Safety Stock
 Material requirements planning
(MRP)

Text Books:
1. Fundamentals of Financial Management
by Houston.
2. Principles of Management Finance by
Lawrence J. Gitrnan 9th & 10th Edition.
Reference Books:
i. Fundamentals corporate finance by
Ross, Westerfield & Jordan.
ii. Financial Management theory &
Practice by Eugene F. Brigham &
Lons, G. Gapenski. s

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