Course: Corporate Finance I

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Course title Corporate Finance I
Course code KUF/CFP1
Organizational form of instruction Lecture
Level of course Bachelor
Year of study not specified
Semester Winter
Number of ECTS credits 6
Language of instruction Czech
Status of course Compulsory-optional
Form of instruction Face-to-face
Work placements This is not an internship
Recommended optional programme components None
Lecturer(s)
  • Kopta Daniel, Ing. Ph.D.
  • Pražáková Jaroslava, Ing. Ph.D.
  • Zeman Petr, Ing. Ph.D.
Course content
Lectures: 1. Introduction to Financial Management (The objective of financial management, Principles of corporate finance, Financial decision, Basic concepts of finance, Finance in the organizational structure of the firm). Time Value of Money (Simple interest and compound interest , Future value and present value, Future value of annuity and present value of annuity, Perpetuities, Nominal and effective interest rates, Ordinary annuity and annuity due, Determining interest rate, Applying the time value of money to bond and stock valuation) 2. Assets Structure and Capital Structure of Enterprises (Assets structure of enterprises, Capital structure theory, Cost of capital: cost of preferred stock, cost of common stock, cost of retained earnings, cost of debt, Weighted Average Cost of Capital (WACC), The Modigliani and Miller theory, The effects of taxes on capital structure, Capital structure and cost of financial distress) 3. Cash Flow (Statement of cash flow, Cash flow calculation, Short-term capital budgeting, Long-term capital budgeting) 4. Financial Analysis (Profitability ratios, Asset management ratios, Debt management ratios, Liquidity ratios, and Shareholder ratios, Method of performance measurement, Du-Pont Analysis, Bankruptcy prediction, Indicators of financial health, Z-score formula, Economical Value Added and Market Value Added) 6. Management of Short-Term Assets, inventory management (Inventory management: characteristic, reason for holding inventory, Cost associated with inventory, Models of inventory management, EOQ model, Methods of inventory pricing 6. Management of Short-Term Assets receivables (Accounts receivables management: characteristic, reason for outstanding active debts, Cost associated with receivables, Receivables management techniques and optimal level assessment) 7. Cash management (characteristic, reason for holding cash balance, cost associated with cash, working with bank balances, Cash management techniques and optimal level assessment, Baumol model, Miller Orry model) 8. Methods of payment (Per other goods, Cash payment, Banker's draft, Exchange, Bank transfer, Documentary collection, Documentary letter of credit, Factoring, Forfaiting) 9. Resources of Short-Term Financing (characteristics, advantages and disadvantages of short term sources, requirement of short term sources, cost and risk of short-term financing, Types of short-term loan borrowing from commercial banks) 10. Evaluation of Investment Projects (Net present value, Internal rate of return, Profitability index) 11. Evaluation of Investment Projects Cost methods. Methods based on profit volume (Payback period, Discounted payback period) 12. Risk and Evaluation of Investment Projects . 13. Sources of Long-Term Finance : Equity (Characteristics of long-term equity sources, Internal equity finance: Retained profit, Dividend policy, Depreciation, External equity finance: Preference stocks, Common stock) 14. Sources of Long-Term Finance : Debt (Characteristics, advantages and disadvantages of long-term debt sources, Types of long-term debt sources: Long-term bank credits, Long-term mortgage bank credits, Mortgages, Funded debt, Bonds (securities) and other debentures, Mortgage bond, Project financing, Leasing, Other long-term non-bank resources)

Learning activities and teaching methods
Monologic (reading, lecture, briefing)
  • Semestral paper - 40 hours per semester
  • Class attendance - 18 hours per semester
  • Preparation for credit - 28 hours per semester
  • Preparation for exam - 82 hours per semester
Learning outcomes
Particular economic discipline discussing enterprise's finances and their management. Financial management and decision-making of an enterprise discussing movement of money and company's capital that is generated by functioning of different forms of an entrepreneurial subject. The main aim of this course is to provide students with the basic knowledge for financial management and financial decision-making in market economics.
The course is an introduction into corporate finance as a field of economic study. Student will get an answer on the following questions: What is the relationship between corporate finance and other economic discipline? How to determine the time value of money? Why is the time value assignation necessary? Which methods can be used for Cash Flow calculation? What is it Financial Analysis? How to make the Financial Analysis? How to manage the Current Assets? Which methods can be used to payment? What is the difference between long and short financing? How to make the Capital Budget
Prerequisites

KEN/CEP
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KEN/EP1
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KEN/OEP1
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KEN/QEP1

Assessment methods and criteria
Combined exam

Credit Requirements: Attend seminars (max 3 absence) Vindication of seminar work Test (min 60%) Enrollment in e-learning system Moodle by the end of the 4th week of the winter semester of the academic year. Examination Requirements: Oral exam (50%), test (50%). A <95 - 100 %> B <90 - 95 %) C <80 - 90 %) D <70 - 80 %) E <60 - 70 %) F <0 - 60 %)
Recommended literature
  • Brealey, R. A., Myers, S. C.:. Teorie a praxe firemních financí. BIZBOOKS, 2014. ISBN 9788026500285.
  • Brealey, R. A., Myers, S. Principles of Corporate Finance. Boston: McGraw-Hill, 2012.
  • Grünwald, R., Holečková, J. Finanční analýza a plánování podniku. Praha: Ekopress, 2009.
  • Jindřichovská, Irena. Finanční management. Vydání první. V Praze : C.H. Beck, 2013. ISBN 978-80-7400-052-2.
  • Kislingerová, E. a kol. Manažerské finance. 3. vydání.. Praha, 2010. ISBN 978-80-7400-194-9.
  • Marek,P. Studijní průvodce financemi podniku. Praha, 2009. ISBN 978-80-86929-49-1.
  • SYNEK, M. - KISLINGEROVÁ, E. Podniková ekonomika.. Praha: C.H. Beck, 2015.


Study plans that include the course
Faculty Study plan (Version) Category of Branch/Specialization Recommended year of study Recommended semester