AIT812 - Advanced Corporate Finance

Outline info
Semester
School
Last revision date 2016-02-01 00:30:51.485
Last review date 2016-03-21 00:15:06.69


Subject Title
Advanced Corporate Finance

Subject Description
This advanced finance subject provides an in-depth study of the concepts and analytical techniques used by financial managers to make sound corporate financing decisions including any ethical considerations. The subject will include a thorough understanding of the corporate financial planning process, working capital management, capital budgeting under uncertainty, capital structure, dividend policy, special financing and investment decisions, derivatives, corporate mergers/acquisitions/divestitures and the importance of strategic issues in financial management.

Credit Status
One credit in the Accounting and Information Technology Graduate Certificate.

Learning Outcomes
Upon successful completion of this subject the student will be able to:

1. Discuss how financial systems work, the channels of inter-mediation and the role played by market and financial intermediaries within the financial environment including ethical considerations.

2. Apply frameworks to value bonds, preferred shares and common shares and evaluate their use in the financing of a firm.

3. Compute the weighted average cost of capital to a firm.

4. Discuss the various measures of risk, methods for estimating the required rate of return for securities and portfolios, as well as market efficiency and the importance of this issue for both investors and corporations.

5. Illustrate a thorough understanding of derivative instruments (forwards, futures, options, swaps) and how they are utilized to manage risk.

6. Use capital budgeting, risk considerations and cash flow estimation to assess capital expenditures.

7. Discuss corporate restructuring through mergers/acquisitions/divestitures.

8. Explain the characteristics of leases; analyze and evaluate leasing decisions.

9. Apply securities laws, investment banking, debt, equity and hybrid instruments, and cost of capital estimation to examine how a firm finances its operations.

10. Explore the critical aspects of financial policy and explain the principles of, and factors affecting corporate dividend policy.

11. Explain the theory of capital structure; analyze capital structure decisions including the impact of corporate and personal tax.

12. Comprehend and explain cash management techniques.

13. Discuss the global influence on interest rates and the importance of foreign exchange in financial management.

14. Demonstrate a thorough understanding of the corporate financial planning process through the use of various financial planning models and analytical techniques.

Cheating and Plagiarism
Each student should be aware of the College's policy regarding Cheating and Plagiarism. Seneca's Academic Policy will be strictly enforced.

To support academic honesty at Seneca College, all work submitted by students may be reviewed for authenticity and originality, utilizing software tools and third party services. Please visit the Academic Honesty site on http://library.senecacollege.ca for further information regarding cheating and plagiarism policies and procedures.

Discrimination/Harassment
All students and employees have the right to study and work in an environment that is free from discrimination and/or harassment. Language or activities that defeat this objective violate the College Policy on Discrimination/Harassment and shall not be tolerated. Information and assistance are available from the Student Conduct Office at student.conduct@senecacollege.ca.

Accommodation for Students with Disabilities
The College will provide reasonable accommodation to students with disabilities in order to promote academic success. If you require accommodation, contact the Counselling and Disabilities Services Office at ext. 22900 to initiate the process for documenting, assessing and implementing your individual accommodation needs.

Prerequisite(s)
Students must meet the Program Eligibility Requirements as stated on the program web page: https://www2.senecacollege.ca/ce/business/accounting/accounting-information-technology.html#EntryRequirements

Topic Outline

  • Overview of the basic concepts (time value of money, weighted cost of capital, valuation of securities, NPV, etc.)
  • Capital budgeting
  • Investment risk/return and portfolio theory, market efficiency
  • Long-term sources of funds (banks, bonds, preferred shares, common shares)
  • Capital structure (business and financial risks, impact of taxation)
  • Dividend and financial policy (theories and factors affecting dividend policies)
  • Special financing and investment decisions (comparison of APV, WACC and ERM, leases)
  • Corporate restructuring (mergers/acquisitions/divestitures, external growth)
  • Treasury risk management(interest rate and exchange rate risks, duration, gap analysis)
  • Derivative instruments (forwards, futures, options, swaps, hedging, pricing models)
  • Corporate financial planning process (forecasting, short-term and long-term planning, strategic decision and ethical issues)
     

Mode of Instruction
In-Class
A combination of teaching methods will be utilized which may include lectures, case studies, discussions, group and individual work.

Prescribed Texts
Title: Advanced Corporate Finance: A Practical Approach
Edition: 1 E
Author(s): Wajeeh Elali and Therese Trainor
Publisher: Pearson Education Canada, 2009
ISBN: 978-0-32-149407-8.

FN2 CD. CGA Canada.

Reference Material
None.

Required Supplies
None.

Promotion Policy

Grading Policy
A+ 90%  to  100%
A 80%  to  89%
B+ 75%  to  79%
B 70%  to  74%
C+ 65%  to  69%
C 60%  to  64%
D+ 55%  to  59%
D 50%  to  54%
F 0%    to  49% (Not a Pass)
OR
EXC Excellent
SAT Satisfactory
UNSAT Unsatisfactory

For further information, see a copy of the Academic Policy, available online (http://www.senecacollege.ca/academic-policy) or at Seneca's Registrar's Offices.


Modes of Evaluation
Assignments are due on the dates specified. Should extenuating circumstances arise, please contact your instructor immediately, prior to when your assignment is due, so an appropriate course of action can be established. Late assignments may be subject to a penalty of up to 10% per week and will not generally be accepted beyond two weeks after the assignment due date.

In cases of cheating or plagiarism, the College Academic Policy will prevail.  Please ensure that all assignments and reports are properly documented.

Students are referred to the following web site for the Seneca College Library MLA Style Guides, Academic Honesty Policy and Copyright guidelines:  

http:/senecacollege.ca/library

Dates for evaluations are specified in the weekly schedule addendum to this outline. The evaluation process may include, but is not limited to, tests, exams, assignments or presentations. Any absences or missed submissions due to medical or other reasons must be supported by medical or other appropriate documentation within one (1) week of the due date. The faculty and program area must be notified immediately in the even of a missed evaluation. Upon acceptance of the documentation, the weighting of the missed deliverable will normally be applied to the final exam.

English Competency:

The ability to communicate effectively is essential for success in business. Therefore, you must demonstrate English competency in this course in both oral and written work. Ensure your written work includes correct sentence structure, spelling and punctuation. Always spell check, edit and proofread your work.

Grading is based on the following marking scheme:

Assignment(s) 10%
Mid-Term Test 30%
Final Exam 60%





Please retain this course outline document for future educational and/or employment use. 

Program Coordinator
Keith Chapin

Approved by: Jeff McCarthy