Corporate Finance
《跨国公司金融》（1）
Course objectives
Provide students with an in-depth understanding of Corporate Finance
Equip students with conceptual and analytical skills necessary to make sound financial decisions in modern-day firms.
Get familiar with key issues faced by financial managers.
Improve students English proficiency
《跨国公司金融》（1）
Course Book and Reference
Stephen ,Randolph W. Westerfield and Jeffrey F. Jaffe, Corporate Finance, 5th Edition, 1999
Richard A. Brealey, Stewart , Principles of Corporate Finance, 5th edition,
《跨国公司金融》（1）
《跨国公司金融》（1）
Assessment
Homework 30%
Group Activities and case study 20%
Final Exam 50%
Total 100%
《跨国公司金融》（1）
You
Name, Student number
Please comment on the following items:
Your dream in career
Your expectation from the course
Any comments on the course and the way that the instructor deliver the course
《跨国公司金融》（1）
Basic Concerns of Corporate Finance
What long-term investment strategy should a company take on?
How can cash be raised for the required investments?
How much shout-term cash flow does a company need to pay its bills?
《跨国公司金融》（1）
What is Corporate Finance ?
The balance-sheet model of the firm
Capital budgeting(expenditure)
Capital Structure
Short-term operating cash flows managing
《跨国公司金融》（1）
What financial managers do?
To create value from the firm’s capital budgeting, financing and liquidity activities.
To buy asset that generate more cash than they cost
To sell securities that raise more cash than they cost
See cash flow between the firm and financial mkt
《跨国公司金融》（1）
Most Critical Element in Finance:
Cash Flows
Source
Where are the cash flow coming from or going to? Timing
When are the cash flow coming in or going out? Risk
How certain are the cash flows?
《跨国公司金融》（1）
Debt and Equity
Contingent claims
on the total firm value
《跨国公司金融》（1）
Types of Business Structure
Sole Proprietorship Cheapest and easy to form, no corporate taxes, unlimited liability, limited life, limited access to funds
Partnership
Inexpensive and easy to form, unlimited liability, limited life, difficulty of transferring ownership
Corporation limited liability, ease of ownership transfer and perpetual succession, double taxation for shareholders
《跨国公司金融》（1）
Application 1
Douglas Thompson worked as a senior software engineer for MacroLink Inc. for many years. To heed the government’s call for technopreneur, he decided to start his own business. What form of business structure would you advise Douglas? Why??
《跨国公司金融》（1）
Application 2
Architects, accountants and lawyers are professionals who are not allowed to incorporate their practices so as not to provide them the limited liability protection for the professional services which they are supposed to offer with due care and diligence. Therefore, these practices are either sole proprietor or partnership. What are the major concerns in limiting these practices to either sole proprietorship or partnership?
《跨国公司金融》（1）
Goals of the Corporate Firm
The Contractual Perspective of a Firm
《跨国公司金融》（1）
Course Framework
Overview
Value and Capital Budgeting
Risk
Capital structure and dividend policy
Long-term financing
Financial planning and short-term finance
Special topics
《跨国公司金融》（1）
