F.C Case Study Harvard Business School

This step involves short and long term debt equity analysis. The proportion of equity capital depends on the possessing and additional funds will be raised. The choice of the source of funds the company has are the issue of shares and debentures, loans to be taken from banks and financial institutions and public deposits to be drawn in form of bonds. The choice will depend on relative merits and demerits of each source and period of financing. The management of the investment funds is key in allocating that the funds are going in the correct place. The profits that are made can be down in two ways dividend declaration which includes identifying the rate of dividends and retained profits in which the volume has to be decided which will depend upon expansion and diversification of the company. The management of cash is another important function. Cash is needed for all different aspects of the company such as payment of salaries, overhead and bills. All of these are important in a company and how successful the financial aspect is going to be.The financial management practices include capital structure decision, investment appraisal techniques, dividend policy, working capital management and financial performance assessment. A company needs to have well financial in order to be successful. “A company that sells well but has poor financial management can fail.” (Johnston)

Ross, S. A., Westerfield, R. W., & Jordan, B. D. (Eds.). (2011). Essentials of corporate finance (7th ed., Rev.). New York, NY: McGraw-Hill Irwin.

The author Robert Solomon argues that ethics has to an integral part with regard to business management. He does not believe that business management must include unethical or illegal methods to be able to succeed. Solomon preaches that business management is not as simple as obtaining revenue. “Businesses need to abide by fair policies and their owners have to be ethical in dealing with their customers” (Shaw p. 37). The author acknowledges that while illegal practices in business management could bring positive results at first, eventually the business is bound to fail. This is why Solomon recommended eight important policies that can help businesses in integrating ethics into their operations.

to apply the theory to real world cases. A solid understanding of principles in finance,

This course applies corporate finance concepts to make management decisions. Students learn methods to evaluate financial alternatives and create financial plans. Other topics include cash flows, business valuation, working capital, capital budgets, and long-term financing.

This practice exam covers a selection of the types of questions that may be asked in the

Parrino, R., Kidwell, D. S., & Bates, T. W. (2012). Fundamentals of Corporate Finance (2nd ed.). John Wiley & Sons, Inc. Retrieved from the University of Phoenix eBook database.

valuation of many assets in the firm’s financial statements. It is also tied to the demand for

In this assignment you will demonstrate your understanding of capital investment techniques by evaluating the following three case studies.

The senior management of Company A employ you to advise them on the cost of capital the company should use to calculate net present value and decide whether or not to undertake a new investment project. You may assume that the new project is comparable to the average of the company’s existing projects in all respects.

This document is authorized for use only in Financial Management23 by Dr. Raj, at Institute of Management Technology - Dubai from January 2015 to July 2015.

1-a How can the CAPM be used to estimate the cost of capital for a real business investment decision?

Parrino, R., Kidwell, D.S., & Bates, T. W. (2012). Fundamentals of Corporate Finance (2nd ed).

REFERENCES•Ross, S.A., Westerfield, R.W., Jaffe, J., Jordan, B.D. "Modern Financial Management". McGraw-Hill, Eighth Edition, (2008)•R.A. Brealey and S.C. Myers, "Principles of Corporate Finance", McGraw-Hill, Seventh Edition, (2003).

Detailed course programme Day 1 Day 2 Day 3 Day 4 Day 5 Day 6 and 7 Framework, Accounts preparation and Non Current Assets Group accounts Inventories, Leases, Provisions, Substance over form Cashflows and Ratios Financial Instruments, Pensions, Deferred tax and Share based payment DipIFR