FINPCFA Corporate Finance A

School of Business Administration in Karvina
Winter 2010
Extent and Intensity
2/1/0. 3 credit(s). Type of Completion: zk (examination).
Teacher(s)
doc. Ing. Pavla Klepková Vodová, Ph.D. (lecturer)
Guaranteed by
Ing. Michaela Roubíčková, Ph.D.
Department of Finance and Accounting – School of Business Administration in Karvina
Course Enrolment Limitations
The course is also offered to the students of the fields other than those the course is directly associated with.
fields of study / plans the course is directly associated with
Syllabus (in Czech)
  • 1. Introduction to corporate finance
    Development of corporate finance. The corporate form of business according to organization. Origin and development of corporation. Corporate finance and financial management. Corporate finance in market economy.
    2. Alternative theories of corporation
    Goal of the corporation. Managerial theories - simple managerial model, Baumol model, Williamson model, Marris model. Behavioristic theories. Employee's theories.
    3. Agency conflict
    Types of agency conflicts, agency costs, managerial compensation. Information asymmetry. Corporate governance models - Anglo-American model, Continental-European model.
    4. Corporate financing
    Characteristics, advantages and disadvantages of internal and external, long-term and short-term financing. Corporate financing in practice. Equity and debt securities.
    5. Dividend policy
    Types of dividends. Definition of dividend. Dividends according to shares, forms of dividend, interval of paying. How to pay dividends in the Czech Republic and in the world. Share repurchase as an alternative of dividend policy.

    6. Present and future value of investment
    Definition of investment. Opportunity costs. Time value of money. Simple present and future value. Other forms of compounding.
    7. Special forms of cash flows
    Present and future value of cash flows. Special forms of cash flows - annuity, growing annuity, perpetuity, growing perpetuity.
    8. Project valuation
    Valuation criteria. Return, risk, liquidity. Net present value. Internal rate of return. Profitability index. Payback period. Average accounting return. Advantages and disadvantages of methods. Valuation of independent and mutually exclusive projects.
    9. Risk of simple investment
    Risk as a part of economy. Risk versus uncertainty. How to determine the probability. Risk of simple investment.
    10. Risk of portfolio
    Risk of portfolio of two assets. Unique risk and market risk. Correlation coefficient and its use for investment valuation.
    11. Capital structure
    Searching for optimal capital structure. Theoretical basis. Costs of capital. Costs of equity and debt financing. Financial leverage. Financial risk.
    12. Asset management
    Working capital, net working capital. Short-term financial policy. Hedging principle and its modifications. Cash management. Costs of holding cash. Baumol model. Miller-Orr model. Credit management. Inventory management, costs of holding inventory. Model Just-in-time.
    13. Mergers and acquisition
    Principles of mergers and acquisition. Advantages and disadvantages of integration. Synergy. Types of takeovers. Hostile takeovers, takeover defences. Holding. Legal aspects of integration in the Czech Republic
Literature
    required literature
  • ROSS, SR., WESTERFIELD, RW., JORDAN, BD. Fundamentals of Corporate Finance (7th Edition). Boston: McGraw-Hill, 2006. ISBN 0-07-319262-7. info
  • BREALEY, A., MYERS, SC., ALLEN, F. Corporate Finance. Boston: McGraw-Hill, 2005. ISBN 0-07-111795-4. info
    recommended literature
  • Various readings from The Economist, The Euro and other financial magazines. info
  • BLOCK, SB., GEOFFREY, GA. Foundations of Financial Management. Boston: McGraw-Hill, 2005. ISBN 0-07-284229-6. info
  • MADURA, J. International Corporate Finance. New York: Thompson South-Western, 2005. ISBN 0-32-432382-4. info
  • BURKLEY, A., ROSS, SA., WESTERFIELD, RW., JAFFE, JF. Corporate Finance Europe. Cambridge: McGraw-Hill, 2004. ISBN 0-256-13473-1. info
Language of instruction
English
Further comments (probably available only in Czech)
The course can also be completed outside the examination period.
The course is also listed under the following terms Summer 2008, Winter 2008, Winter 2009, Winter 2011, Winter 2012, Winter 2013.
  • Enrolment Statistics (Winter 2010, recent)
  • Permalink: https://is.slu.cz/course/opf/winter2010/FINPCFA