Strategic corporate finance – teaching plan 2020: Oct-Nov.

 

Strategic corporate finance – teaching plan 2020: Oct-Nov.

 BA (Full) S3 BM  Int 11 (SV HK); assignment due: January 2021

Session	Lecture topic	Reading(s)
1.    October 27 (Tuesday)   10:00-13:00 14:30-17:30	The finance function   Capital markets and market efficiency	WH: Chapter 1 of the recommended text   WH: Chapter 2 of the recommended text   ML: Chapters 1 and 2.   ML: Chapter 9 e-readings:  Slides: managing the finance function. Slides: on objectives of financial management. Slides: financial strategy. Slides: on profitability, liquidity and solvency. Slides: on PE ratio. Slides: time value of money. Slides: agency theory. Slides: capital market. Slides: money market. Slides: efficient market hypotheses. Slides: random walk theory. Slides: Capital asset pricing model. Video: Financial objectives of firms. Video: Influences on financial objectives. Video: Finance functions. Video: CFO attributes. Video: Financial strategy. Video: the basics of corporate governance. Video: corporate governance (introduction). Video: importance of financial performance measurement. [also an introduction to key performance indicators]. Video: capital market. Video: what is a stock exchange. Video: key players of the capital market. Video: investment banks. Video: efficient market hypothesis. Video: efficient markets and random walk. Video: capital market efficiency. Basic concept of finance: Video: time value of money. Video: how to calculate present value. Video: present value of a perpetuity. Videos on financial ratios Ratio analysis on profitability. Ratio analysis on gearing. Ratio analysis: shareholder ratios. Ratio analysis: P/E ratio. Ratio analysis: total shareholder return. Ratio analysis: return on assets (ROA). Ratio analysis: Asset turnover and ROCE (ACCA). Ratio analysis: decompose ROA. Ratio analysis: liquidity ratios. Ratio analysis: asset turnover ratio. Ratio analysis: comprehensive lecture (ACCA). * Limitations of ratio analysis (CIMA). Finance portal information on Power Assets. * A revision on income statement (a briefing). * A revision on balance sheet (a briefing). * shareholders' equity on a balance sheet. e-reading: the changing face of the finance function. e-reading: principles of corporate governance. e-reading: capital market. e-reading: time value of money. e-reading: Islamic capital market. e-reading: efficient market theory. e-reading: random walk theory. e-reading: financial ratio analysis (ACCA) [pdf].
2.    October 28 (Wed)   10:00-13:00 14:30-17:30	Sources of capital: equity   Sources of capital: debt and hybrid finance	WH: Chapter 4 of the recommended text.   WH: Chapter 5 of the recommended text  ML: Chapter 8 e-readings:  Slides: bonds and debentures. Slides: types of share. Slides: sources of capital. Slides: long-term financing (debt). Slides: pecking order theory and tradeoff theory. Video: sources of finance. Video: long term finance (CIMA). Video: introduction to debt and equity financing. * on solvency, gearing and risk (CIMA). Video: what is equity. Video: equity finance. Video: types of equity shares. Video: nominal and market values of shares. Video: new share issues lecture part 2: rights issue (CIMA)./ part 1: public issues. * Video : on theoretical ex-rights price (CIMA). Video: what is a preferred stock. Video: share valuation - calculation. Video: factors that affect share prices. Video: how to calculate market capitalization. Video: private placement. (a briefing). Video: rights offering. Video: source of finance: retained profit. Video: different types of shares. Video: long-term debt. Video: debentures. Video: the components of  a bond. Video: types of bonds. Video: how bonds work. Video: Eurobonds market. Video: pricing a bond. Video: relationship between bond prices and interest rates. Video: convertible bond. Video: how are bonds rated? Videos: term loans 1/ term loans 2. Video: equity vs debt. Video: pecking order theory. Video: external sources of finance (short-term): bank overdrafts and loans. Video: source of finance: factoring. e-reading: long-term finance. e-reading: selecting sources of finance ACCA (pdf). e-reading: types of shares (ACCA). e-reading: a brief note on debentures (ACCA).
3.    October 29 (Thu)   10:00-13:00 14:30-17:30	Leasing and an introduction to cost of capital   Cost of capital and capital structure	WH: Chapter 5 & 9 of the recommended text.   WH: Chapter 9 of the recommended text.   ML: Chapter 10 e-readings:  Slides: lease finance. Slides: on factoring and invoice discounting. Slides: short-term financing. Slides: capital structure. Slides: financing decision (capital structure). Slides: cost of capital. Slides: stock valuation. Video: market value of debt (the formula). Video: risk and reward: an introduction. Video: capital asset pricing model (CAPM). Video: introduction to beta in CAPM. Video: risk, return and CAPM. Video on security market line. Video: introduction to cost of capital. Video: nominal and real interest rates. Video: weighted average cost of capital. 1 Video: weighted average cost of capital 2. Video: weighted average cost of capital - an introduction (CIMA). Video: weighted average cost of capital (a comprehensive example, CIMA). Video: a lecture on capital structure. Video: capital structure (CIMA). Video: theories on capital structure (ACCA). Video on financial leverage. Video: capital structure and financial leverage. Video: optimal capital structure. Video: capital structure models. Video: calculating cost of equity using CAPM. Video: hire purchase and leasing. Video: principal agent problem. Video on rating agencies. Video on the yield curve (a brief lecture on yield curve). Video on bond prices and yields. e-reading: cost of capital (CIMA). e-reading: capital structure. e-reading: debt and gearing ratios (ACCA). e-reading: optimum capital structure (ACCA).
4.    October 30 (Fri)   10:00-13:00 14:30-17:30	Investment appraisal & capital budgeting   Dividend policy               Mergers and takeover	WH: Chapter 6 of the recommended text.   WH: Chapter 10 of the recommended text.   ML: Chapters 4 and 5   ML: Chapter 12   WH: Chapter 11 of the recommended text. e-readings:  Slides: investment appraisal. Slides: on NPV. Slides: dividend types. Slides: dividend policy. Slides: dividend yield. Slides: buyback of shares. Video: investment appraisal techniques.Video on payback period method. Video: NPV method. Video: ARR method. Video: IRR. Video: NPV and IRR explained. Video: shareholder ratios. Video: dividend and dividend policy. Video: introduction to dividend policy. Video: introduction to dividend policy (CIMA). Video: corporate dividend policy (CIMA). Video: dividend payout ratio. Video: dividend yield. Video: Gordon growth model on share valuation. Video: dividend irrelevance. e-reading: dividend policy e-reading: dividend theory (ACCA). e-reading: investment appraisal process. e-reading: basic investment appraisal techniques.
5.    November 24 (Tue)   10:00-13:00 14:30-17:30	Assignment guidance Annual reports fo CEC 759.   Subject revision	e-readings:  Slides: merger & acquisition. [1] Slides: merger and acquisition. [2] Video: mergers and acquisitions. Video: Introduction to M&A (ACCA). Video: mergers and acquisitions (CIMA lecture). Video: valuation methods. Video: reasons for M&A failures. Performance evaluation: Videos:  * how to read an income statement. * how to read a balanced sheet. * how to analyze an income statement? * how to analyze a balanced sheet? * cash flow for beginners. * how to read an annual report? * evaluating financial performance (an introduction). * financial performance (ACCA). * financial statement analysis. * Video: types of financial analysis. * ACCA lecture on capital structure. * how to calculate debt to equity ratio from a balance sheet. * Warren Buffet's rule on current ratio and debt equity ratio. e-readings: mergers and acquisitions (CIMA). * complete list of financial ratios.
6.    November 25 (Wed)   10:00-13:00 14:30-17:30	Assignment guidance   Subject revision	e-readings:  Video: financial statement analysis - market value measures. Video: financial analysis made easy. Video: how to analyze income statement (case study). Video on EBITDA. * the irrelevance of dividends. * capital structure of a business. * efficient market hypothesis (a briefing). * are markets efficient? * is the stock market efficient? e-readings: * dividend irrelevance theory.

 

 

References

Watson, D. and Head, A. (2013). Corporate Finance (Principles and Practice), 6th Edition, Pearson [recommended text]. [WH]

McLaney, E. (2009) Business Finance: Theory and Practice 8th Edition, Pearson. [ML]

e-resources

e-resources on strategic corporate finance.