Corporate Finance

As I had stated earlier, I will post what USM finance major learned in overall. This post will be about the content of Corporate Finance. So, what and why learning Corporate Finance?

Finance and financial thinking are everywhere in our daily lives. Consider your decision to go to college. You surely weighed alternatives, such as starting a full-time job immediately, and then decided that college provided you with the greatest net benefit. More and more, individuals are taking charge of their personal finances with decisions such as:

- When to start saving and how much to save in retirement.

- Whether a car loan or lease is more advantageous.

- Whether a particular stock is a good investment.

- How to evaluate the terms for a home mortgage.

Our career paths have become less predictable and more dynamic. In previous generations, it was common to work for one employer your entire career. Today, that would be highly unusual. Most of us will instead change jobs, and possibly even careers, many times. With each new opportunity, we must weigh all the costs and benefits, financial and otherwise.

Some financial decisions, such as whether to pay RM2.00 for your meal, are simple, but most are more complex. In your business career, you may face such questions as:

- Should your firm launch a new product?

- Which supplier should your firm choose?

- Should your firm produce a part of the product or outsource production?

- Should your firm issue new stock or borrow money instead?

- How can you raise money for your start-up firm?

In this course, you will learn how all of these decisions in your personal life and inside a business are tied together by one powerful concept, the Valuation Principle. The Valuation Principle shows how to make the costs and benefits of a decision comparable so that we can weigh them properly. Learning to apply the Valuation Principle will give us the skills to make the types of comparisons - among loan options, investments, and projects - that will turn you into a knowledgeable, confident financial consumer and manager.

This course main content:

1. Interest Rates and Valuing Cash Flows

- The Valuation Principle: The Foundation of Financial Decision Making

- Net Present Value (NPV) and the Time Value of Money (TVM)

- Interest Rates

- Bonds

2. Valuation and the Firm

- Investment Decision Rules

- Fundamentals of Capital Budgeting

- Valuing Stocks

3. Risk and Return

- Risk and Return in Capital Markets

- Systematic Risk and the Equity Risk Premium

- Determining the Cost of Capital

4. Long-Term Financing

- Raising Equity Capital

- Debt Financing

5. Capital Structure and Payout Policy

- Capital Structure

- Payout Policy

6. Financial Planning and Forecasting

- Financial Modeling and Pro Forma Analysis

- Working Capital Managamenet

- Short Term Financial Planning

7. Special Topics

- Option Applications and Corporate Finance

- Risk Manegement

- International Corporate Finance