Acf 465-Applied Corporate Finance

LAHORE UNIVERSITY OF MANAGEMENT SCIENCES

Course Outline

for

APPLIED CORPORATE FINANCE

Instructor’s Name: Dr. Naim Sipra Room No. 161

Telephone Ext: 2161

Office Hours for students: Fridays 3-5 pm

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Course Title APPLIED CORPORATE FINANCE

Course Code ACF 465

Introduction

The objective of this course is to reinforce and expand on the previous financial analysis and corporate finance/intermediate finance courses. Many of the topics covered are the same, but the emphasis is different. By using the case-method methodology the emphasis shifts from learning financial techniques to applying them to make managerial decisions,

Textbook

Since the topics covered in this course are those that are contained in any standard text of corporate finance, therefore, no text is assigned for this course. You may use your Brigham and Gapenski text for review and reference.

Grading: CP 40 %

Quizzes 10 %

Mid-term 25 %

Final 25 %

Session 1

Case: Butler Lumber Company

Assignment Questions

1. Why does Mr. Butler have to borrow so much money to support this profitable business?

2. Do you agree with his estimate of the company’s loan requirements? How much will he need to borrow to finance his expected expansion in sales (assume a 1991sales volume of $3.6 million)?

3. As Mr. Butler’s financial adviser, would you urge him to go ahead with, or to reconsider, his anticipated expansion and his plans for additional debt financing? As the banker, would you approve Mr. Butler’s loan request, and, if so, what conditions would you put on the loan?

Session 2

Case: Toy World, Inc.

Assignment Questions

1. What factors could Mr. McClintock consider in deciding whether or not to adopt the level production plan?

2. What savings would be involved?

3. Estimate the amount of added funds required...