Specific

Students will be able to:

1. Explain how risk factors, inflation, asset diversification and capital rationing are integrated into the capital budgeting process. (A2)
2. Perform sensitivity, scenario and simulation analyses in the evaluation of capital projects. (A2, A3)
3. Explain the role that capital budgeting plays in adding value to the firm. (A1, A2)
4. Discuss the risks and benefits of global investing and explain their importance in corporate strategy. (A1)
5. Discuss the complexities involved in evaluating a foreign investment (exchange rate, risk premiums, etc.). (A2)
6. Define "capital structure" and explain the concept of an optimal capital structure. (A1, A2)
7. Define "leverage" and discuss how the use of debt could increase the expected level of cash flows but how it could also increase risk. (A1, A2)
8. Calculate the effect of debt on corporate taxation and therefore on the firm's cash flows and overall value. (A3)
9. Explain the "discipline of debt" and "signaling" as they apply to leverage. (A2)
10. Define common dividend terminology and describe the process of paying dividends. (A1, A2)
11. Explain various dividend policies and the implications of signaling, investor expectations, and agency costs in setting dividend policy. (A2)
12. Explain stock repurchases, stock dividends, and stock splits and why such actions may (or may not) affect stockholders' wealth. (A2)
13. Perform dividend related calculations, such as dividends per share, payout ratio, plowback rate, and expected returns. (A3)
14. Describe the cash management process and the cash cycle. (A1, A2)
15. Explain the effect of liquidity (excess or deficient) on the value of the firm. (A2)
16. Define the terminology involved in the management of cash and receivables. (A1, A2)
17. Discuss the factors involved in the corporate credit policy process and analyze the credit policy of at least one corporation. (A1, A2, A3)
18. Define the terminology involved in the management of inventory and describe the inventory management process. (A1, A2)
19. Use appropriate formulas to solve cash, receivables and inventory management problems - such as economic order quantities, compensating balances, effective loan rates and effective discount rates. (A3)
20. Define working capital policy and identify different sources of short-term funds, including cash and marketable securities. (A2)
21. Prepare and analyze a corporate cash budget. (A1, A2, A3)
22. Identify the various sources of information necessary to evaluate corporate performance - accounting statements, market data, analyst opinions, the internet. (A2)
23. Perform financial statement analysis using trend statements, comparative statements and ratio analysis. (A2, A3)
24. Distinguish between Economic Value Added and Market Value Added as performance measures. (A2)
25. Describe the characteristics of the various types of corporate restructuring transactions (mergers, acquisitions, hostile takeovers, tender offer contests, divestitures, etc.) and explain the motives for these transactions. (A1, A2)
26. Describe how the mergers and acquisitions field has evolved over time, highlighting some of the recent developments in the industrialized world. (A1, A2)
27. Explain how mergers and acquisitions might enhance shareholder wealth. (A1, A2)
28. Explain the potential agency or ethical problems in restructuring transactions. (A1)
29. Analyze a restructuring transaction using the basic tools and techniques already developed here and in the basic finance course. (A2, A3)
30. Use relevant examples to demonstrate how the non-finance functional areas (management, accounting, human resources, marketing, operations/production) can support financial decision making. (A4)
31. Demonstrate how financial tools might be applied to problems in those non-finance functional areas (management, accounting, et al.) (A3, A4)