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STRATEGIC CORPORATE FINANCE

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ELECTIVES IN FINANCE
STRATEGIC CORPORATE FINANCE
Context:
This course is concerned with the decision-making in the finance sub-system of the enterprise,
such that the short-term and long-term needs of the enterprise are effectively met. The
enterprise needs to be financially efficient, viable and sustainable. This necessitates looking into
the enterprise and the finance function in a larger perspective facing key challenges posed by
the global markets.
Objectives:
At the end of the course the student should be able to
a) Understand the strategic element involved in financial decision-making;
b) Effectively and efficiently manage the both sides of balance sheet, i.e. financing and
investing;
c) Look alternative ways for growing the organization through mergers and acquisitions.
Content outline
1. Financial Environment
Determining financial objectives within the strategic planning process, identify key stakeholders
of organizations and the interests of each stakeholder group, corporate social responsibility, its
relationship to the objective of maximising shareholder wealth, agency theory and its relevance
to financial managers, the professional, regulatory and legal framework relevant to financial
management.
2. Managing the Left-Hand Side of the Balance Sheet
The Cost of Capital: Calculation Pitfalls, Market Risk Premium, Towards a Better Beta, The
“Riskless Rate”, The Cost of Debt, WACC and Hurdle Rates; Issues in designing the capital
structure; low vs. high debt, Alternative sources of financing; Corporate Debt Restructuring:
CDR System and its objectives, Standing Forum, Core Group, Empowered Group, CDR Cell,
Monitoring Mechanism, CDR Performance.
3. Managing the Right-Hand Side of the Balance Sheet
Strategic resource allocation decision, measures of investment choice: NPV, IRR, Payback
Period, etc.; Strategic working capital management, Managing Cash.
4. Dividends and Buybacks
How dividends and buybacks create value, need for a dividend policy, drafting a buyback
program.

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MANAGEMENT CONTROL SYSTEMS
Context:
An understanding of decision and control subsystem of the organisation is necessary for any
Finance professional. These systems receive information primarily from the operating
subsystem. A substantial part of this information looks at the operations from the point of view
of costs and benefits and is used for decisions aimed at maintaining and improving the
effectiveness of operations.
Objectives:
At the end of this course the student should be able to
1. Collect information from operating systems
2. Analyse problems and issues regarding operational effectiveness
3. Make proposals for aiding decision-making.
Content outline:
1.Introduction to cost behaviour and cost volume relationship: Variable and fixed costs; cost
volume profit analysis: linear & non linear.
2.Variation of cost behaviour: cost drivers and cost behaviours; Management's influence on cost
behaviour; Measurement of Cost behaviour.
3. Cost Systems: Job Cost Systems: overhead application; Process costing; variable and
absorption costing; cost Systems under new manufacturing environment; Activity Based
Costing.
4.Profit centres; Transfer pricing: problems of transfer pricing, Responsibility Accounting

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ELECTIVES IN FINANCE STRATEGIC CORPORATE FINANCE Context: This course is concerned with the decision-making in the finance sub-system of the enterprise, such that the short-term and long-term needs of the enterprise are effectively met. The enterprise needs to be financially efficient, viable and sustainable. This necessitates looking into the enterprise and the finance function in a larger perspective facing key challenges posed by the global markets. Objectives: At the end of the course the student should be able to a) Understand the strategic element involved in financial decision-making; b) Effectively and efficiently manage the both sides of balance sheet, i.e. financing and investing; c) Look alternative ways for growing the organization through mergers and acquisitions. Content outline 1. Financial Environment Determining financial objectives within the strategic planning process, identify key stakeholders of organizations and the interests of each stakeholder group, corporate social responsibility, its relationship to the objective of maximising shareholder wealth, agency theory and its relevance to financial managers, the professional, regulatory and legal framework relevant to financial management. 2. Managing the Left-Hand Side of the Balance Sheet The Cost of Capital: Calculation Pitfalls, Market Risk Premium, Towards a Better Beta, The “Riskless Rate”, The Cost of Debt, WACC and Hurdle Rates; Issues in designing the capital structure; low vs. high debt, ...
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