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ACADEMY OF POLICY AND SOCIALIST REPUBLIC OF VIETNAM

DEVELOPMENT Independence – Freedom - Happiness


INTERNATIONAL SCHOOL OF
FINANCE AND ECONOMICS

SYLLABUS FOR CORPORATE FINANCE

AT UNDERGRADUATE LEVEL

1. COURSE NAME:
- Tiếng Việt: Tài chính Doanh nghiệp
- English: Corporate Finance
- Course code:
- Number of credits: 3
2. The Department in charge of the course: International school of finance and economics
- Instructor: Phuong My Hang Pham
- Email address: mhphuong.pham@gmail.com
- Consultation time: 2pm – 4pm, every Thursday
3. Course Description:
- The course is compulsory for undergraduate international economics major and banking
and finance major at the International school of finance and economics.
- The course introduces to students both descriptions and theory on corporate finance,
including valuation and capital budgeting, risk, capital structure, leasing, long and short
term finance.
- The course includes 13 chapters. The two first ones are introductory on corporate
finance, with topics on financial statement and cash flow and so on. Chapter 4, 5 and 6
focus on valuation and capital budgeting. Chapter 7 and 8 introduces basic information
about risks, including lessons from market history, the capital asset pricing model, the
beta and so on... Chapter 9 and 10 will talk about long term finance, 10 and 11 discuss
short term finance and the rest focuses on the capital structure policy.
 Topics of the course include:
- Introduction to corporate finance
- Financial statement and cash flow
- Financial statement analysis and financial models
- Risk, cost of capital and valuation
- CAPM
- Long term finance
- Short term finance
1
- Capital budgeting
 Pre-requisites: Students are expected to have taken the following courses prior to taking
this course
- Principles of accounting
- Financial and monetary policy
4. Purpose of the course:

At the end of the course, students should be able to understand the following knowledge:

- What is corporate finance?


- Three types of basic financial statement
- Understanding capital budgeting techniques
- Understanding risk and return of a investment
- Understanding how the firm raises its short term and long term capital
- Basic valuation methods

Besides, student should also be able to enhance other soft skills, including

- Team work
- Self-research
- Presentation

5. Course contents
5.1. This is 3 credit course, equivalent to 45 hours, in which:
- 30 hours of lecture
- 12 hours of discussion
- 3 hours of revisions

5.2. Course materials


- Text book: Ross, SA, Westerfield, R.W, Jaffee, J.F (2006), Corporate Finance, 7 th
Edition, McGraw – Hill and Irwin
5.3. Course outlines
Topics Reference and
No.
homework
Introduction to corporate finance
1.1. What is corporate finance
Chapter 1
1.2. The corporate firm
Concept
Week 1 1.3. The importance of cash flows
questions: 1.3;
1.4. The goals of financial management
1.7, 1.9, 1.10
1.5. The agency problem and control of the
corporation

2
Topics Reference and
No.
homework
1.6. Regulation
Financial statement and cash flow
Chapter 2
2.1. The balance sheet
Concept
2.2. The income statement
questions: 2.2;
2.3. Taxes
Week 2 2.9
2.4. Net working capital
Problems: 2.7;
2.5. Financial cash flow
2.10; 2.13; 2.14;
2.6. Accounting statement of cash flows
2.18; 2.22
2.7. Cash flow management
Financial statements analysis and financial models Chapter 3
3.1. Financial statements analysis Concept
3.2. Ratio analysis questions: 3.2,
Week 3 3.3. The DuPont identity 3.6
3.4. Financial models Problems: 3.5;
3.5. External financing and growth 3.14; 3.15; 3.17;
3.18
Discounted cash flow valuation
4.1. Valuation: the one-period case Chapter 4
4.2. The multi-period case Concept
4.3. Compounding periods questions:4.4; 4.5
Week 4
4.4. Simplifications Problems: 4.8;
4.5. Loan amortization 4.11; 4.15; 4.29;
4.6. What is a firm worth? 4.36; 4.38

Net present value and other investment rules


Chapter 5
5.1. Why use net present value?
Concept
5.2. The payback period method
questions: 5.3;
5.3. The discounted payback period method
Week 5 5.6; 5.12
5.4. The internal rate of return
Problems: 5.3;
5.5. Problems with the IRR approach
5.7; 5.11; 5.14;
5.6. The profitability index
5.19; 5.21
5.7. The practice of capital budgeting

Week 6 Midterm examination

Risk and return: Lessons from market history and Chapter 10,11
Week 7 the CAPM Concept
7.1. Returns questions: 10.2;

3
Topics Reference and
No.
homework
7.2. Holding period of returns 10.4; 11.4; 11.6
7.3. Return statistics Problems: 10.4;
7.4. Average stock returns and risk free returns 10.7; 10.15; 11.6;
7.5. Risk statistics 11.9; 11.22;
7.6. Expected return, variance and covariance 11.26
7.7. The return and risk for portfolio
7.8. Market equilibrium
7.9. Relationship between risk and expected
return

Risk, cost of capital and valuation


8.1. The cost of capital
Chapter 13
8.2. Estimating the cost of equity capital with
Concept
CAPM
questions: 13.4;
8.3. Estimation of Beta
13.9
Week 8 8.4. Determinants of Beta
Problems: 13.7;
8.5. The dividend discount model approach
13.9; 13.12,
8.6. Cost of capital for divisions and projects
13.15; 13.16;
8.7. Cost of fixed income securities
13.20; 13.21
8.8. The weighted average cost of capital
8.9. Valuation with RWACC
Long term financing
9.1. Some features of common and preferred
stocks
9.2. Corporate long term debt Chapter 15,20
9.3. Some different types of bonds Concept
9.4. Early stage financing and venture capital questions: 15.4;
Week 9 9.5. The public issue 15.10;20.5; 20.8
9.6. Alternative issue methods Problems: 15.3;
9.7. The cash offer 20.5; 20.8; 20.13;
9.8. The announcement of new equity and the 20.14
value of the firm
9.9. The cost of new issues

Leasing
Chapter 21
10.1. Types of leases
Concept
Week 10 10.2. Accounting and leasing
questions: 21.4;
10.3. Taxes, the IRS, the leases
21.8
10.4. A detour for discounting and debt capacity

4
Topics Reference and
No.
homework
with corporate taxes Problems: 21.7;
10.5. NPV analysis of lease versus by decision 21.10; 21.12;
10.6. Debt displacement and lease valuation 21.14; 21.18
10.7. Reasons for leasing
Capital structure: the basic concepts Chapter 16
13.1. The capital structure question and the Pie
theory Concept
13.2. Maximizing firm value versus questions: 16.5;
Week 11 maximizing stockholder interests 16.6
13.3. Financial leverage and firm value Problems: 16.3;
13.4. Modigliani and Miller: proposition II 16.8; 16.19;
13.5. Taxes 16.19; 16.23;
16.24

Valuation and capital budgeting for the levered


firm
14.1. Adjusted and capital budgeting for the Chapter 18
levered firm Concept
14.2. Flow to equity approach questions: 18.2;
Week 12 14.3. Weighted average cost of capital method 18.5
14.4. A comparison of the APV, FTE and Problems:18.4;
WACC approach
18.7; 18.10;
14.5. Valuation when the discount rates must
be estimated 18.14; 18.16
14.6. APV example
14.7. Beta and leverage

Short term financing: planning and cash


management
11.1. Tracing cash and net working capital
Chapter 26 &27
11.2. The operating cycle and the cash cycle
Concept
11.3. Some aspects of short tern financial
questions: 26.4;
policy
Week 13 26.5; 27.10
11.4. Cash budgeting
Problems: 26.5;
11.5. Cash management
26.10; 26.11;
- Reasons for holding cash
26.15; 27.4; 27.9
- Understanding float
- Cash collection and concentration
- Managing cash disbursement

5
Topics Reference and
No.
homework
- Investing idle cash
Credit and inventory management Chapter 28
12.1. Credit and receivables Concept
12.2. Terms of the sale questions:
12.3. Analyzing credit policy 28.6; 28.8
Week 14 12.4. Optimal credit policy Problems:
12.5. Credit analysis 28.7; 28.10;
12.6. Collection policy 28.12; 28.17;
12.7. Inventory management 28.20
12.8. Inventory management techniques

Week 15 Revisions

6. Course Assessment
Evaluation Weight Deadline
Throughout
Attendance Attendance 5%
the course
Homework Homework prepared and Throughout
10%
preparation submitted before class the course
Major assignment Group assignments 15% TBC
Mid term MCQ and Short answers 10% TBC
Final exam MCQ and Short answer questions 60% TBC

7.1. Attendance and participation


- 5 marks for fully attending all the lectures
7.2. Homework preparation
- 10 marks for homework prepared and submitted before class
7.3.Major assignments
- Group assignment of 5 students
- Student’s mark may be adjusted according to contribution of student to group work

7.4.Mid-term examination
- Individual examination
- Mid-term examination takes place in week 6

6
7.5. Final exam

Final examination contains MCQ, True/false questions and short answer questions. In
which:

- 20 MCQs (40%)
- 4 short answer questions (60%)