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Introduction to Corporate Finance

Session One

Corporate Finance
Text book: Fundamentals of Corporate Finance by Brealey, Myers, Marcus
Reference book: Corporate Financial Management by Douglas R. Emery & John D. Finnerty

Corporate Finance
Activity Quiz Assignment Hourly Exam Report/Presentation Final Marks 10 10 20 10 50 Duration Max. 15 minutes Two weeks 75 Minutes N/A 3 hours Frequency Three Two Two One One Selection Best 2 Best 1 Best 1 One One Weight age 10% 10% 20% 10% 50%

Course Outline
Introduction

Special Topics

Value & Investment

Debt & Pay out Policy

Risk
Financing

What is Corporate Finance ?


Corporate Finance is to oversee the financial activities of a company. It is primarily concerned with maximizing shareholder value through longterm and short-term financial planning and the implementation of various strategies. Everything from capital investment decisions to investment banking falls under the domain of corporate finance.

The Role of The Financial Manager


Capital Budgeting Decision
Decision to invest in various assets.

also called the Investment Decision

The Role of The Financial Manager


Financing Decision
The form and amount of financing of a firms investments.

Capital Structure
The mix of long term debt and equity financing.

The Role of The Financial Manager


(2)
Firm's
operations Financial Manager

(1)

(4a)

Investors

Real assets

(3)
(1) Cash raised from investors (2) Cash invested in firm

(4b)

(stockholders/ debtholders save and invest in a firm.

(3) Cash generated by operations (4a) Cash reinvested (4b) Cash returned to investors

Who is The Financial Manager?


Chief Financial Officer

Treasurer

Controller

Who is The Financial Manager?


Chief Financial Officer (CFO)
Oversees the treasurer and controller and sets overall financial strategy.

Treasurer
Responsible for financing, cash management, and relationships with banks and other financial institutions.

Controller
Responsible for budgeting, accounting, and taxes.

Thank you

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