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BHM805

Corporate Finance

This course introduces students to corporate finance principles and practices. It explores financial statement analysis, investment decisions, financing strategies, and dividend policies. Students will learn to apply financial tools and techniques for effective decision-making in corporate organizations. The course also covers working capital management, capital structure, cost of capital, and risk assessment. Mergers, re-organizations, and international finance are also discussed to provide a comprehensive understanding of corporate financial management.

About this course

Difficulty
Intermediate
Study hours
28 hours
Maths
Intermediate
Content
Theoretical, case study, problem solving
Practical work
No
How it is assessed
  • Assignments
  • Tutor Marked Assignments
  • Final Examination

One paragraph, so you can see how it reads

BHM805 · UNIT 1 INTRODUCTION TO CORPORATE FINANCE

The nature, content and extent of corporate finance are bonded by the type of business activities carried out by a firm. This requirement differs just as organizations decisions differ. Decisions on what business to go into rests on the shoulders of stakeholders need.

What you should be able to do

  1. Explain the concept and scope of corporate finance
  2. Analyze financial statements and ratios
  3. Evaluate investment opportunities
  4. Make informed financing decisions
  5. Understand dividend policy and its impact
  6. Apply capital budgeting techniques

What it prepares you for

Careers
  • Financial Analyst
  • Investment Banker
  • Portfolio Manager
  • Corporate Treasurer
  • Management Consultant
Where it is applied
  • Banking
  • Investment Management
  • Corporate Finance
  • Consulting
  • Insurance

Where it gets hard

The units students slow down on, and what makes each one heavy.

  • Module III: Investment and Financing Decisions

    Unit 3: Cost of Capital Approach

    Requires understanding of complex financial models and forecasting techniques.

  • Module III: Investment and Financing Decisions

    Unit 4: Risk Associated with Cost of Capital

    Involves advanced statistical analysis and interpretation of risk metrics.

A suggested way through it

Suggested

13 weeks, about 30 hours in total. Yours will differ.

  1. Week 1Module I: Overview of Corporate Finance
    • Unit 1: Introduction to Corporate Finance · 2 hours

      Define corporate finance, its scope, and goals.. Identify and explain the tools used in corporate finance..

    • Unit 2: Objective Function in Corporate Finance · 2 hours

      Discuss the need for an objective function in corporate finance.. Explain the characteristics of a 'right' objective function..

  2. Week 2Module I: Overview of Corporate Finance
    • Unit 3: Forms of Business · 2 hours

      Compare and contrast sole proprietorships, partnerships, and corporations.. Explain the goals of a corporate firm..

    • Unit 4: Agency Problems and Control of Corporations · 2 hours

      Explain agency relationships and agency problems.. Discuss managerial compensation and control of the firm..

  3. Week 3Module I: Overview of Corporate Finance
    • Unit 5: Financial Market and the Corporation · 2 hours

      Describe cash flows to and from the firm.. Explain the functions of financial markets..

  4. Week 4Module II: Understanding Financial Statement
    • Unit 1: Principal Financial Statement · 2 hours

      Understand the construction of income statements.. Differentiate between accrual and cash-based income statements..

  5. Week 5Module II: Understanding Financial Statement
    • Unit 2: Financial Ratios · 2 hours

      Explain the nature and classification of financial ratios.. Discuss standards for financial ratio comparison..

  6. Week 6Module II: Understanding Financial Statement
    • Unit 3: Analysis of Financial Ratios · 2 hours

      Compute financial ratios from financial statements.. Analyze and interpret computed ratios..

  7. Week 7Module II: Understanding Financial Statement
    • Unit 4: Financial Planning and Growth · 2 hours

      Explain the dimensions and role of financial planning.. Understand the components of a financial plan..

  8. Week 8Module II: Understanding Financial Statement
    • Unit 5: Preparation of Estimated Income Statement and Balance Sheet · 2 hours

      Prepare a pro forma income statement.. Prepare a pro forma balance sheet..

  9. Week 9Module III: Investment and Financing Decisions
    • Unit 1: Working Capital Management · 2 hours

      Define working capital and its components.. Explain basic tradeoffs in working capital management..

  10. Week 10Module III: Investment and Financing Decisions
    • Unit 2: Capital Structure Decision · 2 hours

      Define capital structure.. Evaluate a company's capital structure..

  11. Week 11Module III: Investment and Financing Decisions
    • Unit 3: Cost of Capital · 2 hours

      Define cost of capital and its role in investment analysis.. Differentiate between cost of equity and cost of debt..

  12. Week 12Module III: Investment and Financing Decisions
    • Unit 4: Risk Associated with Cost of Capital · 2 hours

      Explain the risk-free rate of return.. Discuss business and financial risk premiums..

  13. Week 13Module III: Investment and Financing Decisions
    • Unit 5: Capital Budgeting · 2 hours

      Explain options embedded in capital budgeting.. Discuss the option to delay, expand, or abandon a project..

Preparing for the exam

What to do
  • Review financial statement analysis techniques from Units 1-3
  • Practice calculating financial ratios and interpreting their implications
  • Focus on understanding the different approaches to capital budgeting (Unit 5)
  • Create summaries of key concepts in capital structure and cost of capital (Units 2-3)
  • Solve practice problems related to investment and financing decisions
  • Review all Tutor Marked Assignments (TMAs) and their solutions
  • Allocate time to understand the formulas and their applications
  • Create concept maps linking investment decisions to firm value
  • Study examples of real-world corporate finance cases
  • Practice time management during mock exams to simulate exam conditions

Questions students ask about this course

What is BHM805 about?

This course introduces students to corporate finance principles and practices. It explores financial statement analysis, investment decisions, financing strategies, and dividend policies. Students will learn to apply financial tools and techniques for effective decision-making in corporate organizations. The course also covers working capital management, capital structure, cost of capital, and risk assessment. Mergers, re-organizations, and international finance are also discussed to provide a comprehensive understanding of corporate financial management.

How many units does BHM805 have?

BHM805, Corporate Finance, has 21 units across 4 modules, over 139 pages of course material. You can read it one unit at a time.

How many credit units is BHM805?

BHM805 carries 2 credit units, at 800 level in Management Sciences.

Is BHM805 hard?

BHM805 is rated intermediate level, with intermediate mathematical content. It is mostly theoretical, case study and problem solving work.

How long does BHM805 take to study?

About 28 hours of study, spread across its 21 units.

How is BHM805 assessed?

BHM805 is assessed by Assignments, Tutor Marked Assignments and Final Examination.

What can I do with BHM805?

Financial Analyst, Investment Banker, Portfolio Manager, Corporate Treasurer and Management Consultant.

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