...Special issue about the study subject 6 2.3. Relating issues raised in the article with the business environment and financial system in Ethiopia 7 2.4. Points we Agree or Disagree with 7 2.5. One part of the article that helped to understand finance 8 III. Hypothesis Comparison. 8 IV. How the information in the article affect the business manager in us 9 4.1. Becoming a better financial manager 9 4.2. Becoming a better professional 9 4.3. Practicing suggestions in the article 9 4.4. Issues listed by the authors 10 References 13 I. Article Summary 1.1. Article Title: The theory and practice of corporate finance: Evidence from the field 1.2. Authors: John R. Graham and Campbell R. Harvey 1.3. Publication: the article is published in the Journal of Financial Economics, Volume 60, Issue 2, Pages 187-243, dated 31/05/2001. The publisher is North-Holland. 1.4. Reviewer: Group 8 members 1. 1.5. Purpose of the Article The article reports the result of a comprehensive survey on the practice of corporate finance conducted in 1999 G.C by the above mentioned two authors in the USA. Unlike previous similar studies in theory and practice of corporate finance, the article address a broader scope in the field of corporate finance including capital budgeting, cost of capital and capital structure, which according to the authors allows “linking responses of survey participants across areas”. Selecting a large sample of cross-section firms with approximate population size of...
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...POST GRADUATE PROGRAMME IN MANAGEMENT AY 2015-16 TERM: III TITLE OF THE COURSE: FINANCE II CREDITS: 4 Name of the Faculty Arnab Bhattacharya Gaurav Singh Chauhan Kousik Guhathakurta Radha M. Ladkani Faculty Block/ Room No. J BLOCK C-102 A-106 J BLOCK Email Telephone Number arnabb@iimidr.ac.in gauravs@iimidr.ac.in kousikg@iimidr.ac.in; radhal@iimidr.ac.in; 0731-2439589 0731-2439592 0731-2439518 0731-2439698 COURSE DESCRIPTION The second core course in Finance deals with the core corporate finance functions in an applied setting. The participants are exposed to real world corporate finance decisions to be taken up by managers for creating value. Such an exposure is accomplished through a mix of theory and practice. The pedagogy employed reflects a judicious mix of case discussions, lectures and problem solving approach. COURSE OBJECTIVES The objective is to familiarize participants with the three major decision areas of Corporate Finance, viz. the investments, financing and earnings distribution decisions. Subsequently the participants are to be offered an integrated view of the decision areas by discussing the issues in corporate valuations and risk management. The course aims at sharpening the financial decision making skills of the participants. EXPECTED LEARNING OUTCOMES AND ASSOCIATED MEASURES At the end of the course student is expected to accomplish the following learning outcomes. Alignment of Course Learning Outcomes (CLOs)...
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...M Finance Vrije Universiteit Amsterdam - Fac. der Economische Wet. en Bedrijfsk. - M Finance - 2012-2013 Vrije Universiteit Amsterdam - Fac. der Economische Wet. en Bedrijfsk. - M Finance - 2012-2013 I Inhoudsopgave Vak: Institutional Investments and ALM Vak: Valuation and Corporate Governance Vak: Thesis Vak: Asset Pricing Vak: Derivatives and Asset Management Vak: Empirical Finance Vak: Research Project Finance Vak: Financial Markets and Institutions Vak: Private Equity and Behavioral Corporate Finance for Finance Vak: Financial Risk Management (Quantitative Finance) Vak: Real Estate Management Vak: Adv Corporate Finance 4.1 Vak: Valuation and Corporate Governance for Finance Vak: Institutional Investments and ALM for Finance 1 2 3 3 4 6 7 9 10 11 12 13 14 14 Vrije Universiteit Amsterdam - Fac. der Economische Wet. en Bedrijfsk. - M Finance - 2012-2013 II Institutional Investments and ALM Course code Credits Language of tuition Faculty Coordinator Teaching staff Teaching method(s) E_FIN_IIALM () 6.0 English Fac. der Economische Wet. en Bedrijfsk. prof. dr. C.G.E. Boender prof. dr. C.G.E. Boender, prof. dr. T.B.M. Steenkamp Lecture Course objective Achieve advanced knowledge of the investment process of institutional investors, like pension funds and insurers. The main objective is to fully understand the most important theoretical concepts in the institutional investment process and the way these concepts are used in practice. After following the...
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...recently conducted a comprehensive survey that analyzed the current practice of corporate finance, with particular focus on the areas of capital budgeting and capital structure. The survey results enabled us to identify aspects of corporate practice that are consistent with finance theory, as well as aspects that are hard to reconcile with what we teach in our business schools today. In presenting these results, we hope that some practitioners will find it worthwhile to observe how other companies operate and perhaps modify their own practices. It may also be useful for finance academics to consider differences between theory and practice as a reason to revisit the theory. We solicited responses from approximately 4,440 companies and received 392 completed surveys, representing a wide variety of firms and industries.1 The survey contained nearly 100 questions and explored both capital budgeting and capital structure decisions in depth. The responses to these questions enabled us to explore whether and how these corporate policies are interrelated. For example, we investigated whether companies that made more aggressive use of debt financing also tended to use more sophisticated capital budgeting techniques, perhaps because of their greater need for discipline and precision in the corporate investment process. More generally, the design of our survey allowed for a richer understanding of corporate decision-making by analyzing the CFOs’ responses in the context of various company...
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...CORPORATE FINANCE HONOURS 2011-2012 Topic: Behavioural corporate finance Lecturer: Yue (Lucy) Liu E-mail: Yue.Liu@ed.ac.uk Outline Psychological phenomena Biases Heuristics Framing effects Impact on corporate finance Valuation Capital Budgeting Capital structure Dividend policy Mergers and acquisitions Yue (Lucy) Liu 2011/2012 Corporate Finance 2 Psychological phenomena Bias Excessive optimism Overconfidence Confirmation bias Illusion of control Heuristics Representativeness Availability Anchoring and adjustment Affect Heuristic Framing effects Loss aversion Aversion to a sure loss Yue (Lucy) Liu 2011/2012 Corporate Finance 3 Biases Bias A predisposition toward error. – Excessive optimism People overestimate how frequently they will experience favorable outcomes and underestimate how frequently they will experience unfavorable outcomes. – Overconfidence People make mistakes more frequently than they believe and view themselves as better than average. – Confirmation bias People attach too much importance to information that supports their views relative to information that runs counter to their views. – Illusion of control People overestimate the extent to which they can control events. Yue (Lucy) Liu 2011/2012 Corporate Finance 4 Heuristics Heuristic A rule of thumb used to make a decision. – Representativeness People make judgments based on stereotypic thinking, asking how representative...
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...Finance has a close relationship to a number of other business disciplines. It is important that we understand why a finance major needs these other skills and abilities. Let's take them one at a time: 1. Economics provides the theory that finance uses. The field of finance is a very new discipline, beginning formally around 1920. Before that, financial problems were referred to as "economic problems" or (even earlier) "problems in political economy." During the 1920s, finance broke away from economics and became a discipline of its own. Think of finance today as being applied economics. In other words, economics provides the theory; finance takes that theory and applies it to real world situations. 2. Accounting is sometimes called "the language of business" and it is certainly true that it is a language that finance practitioners need to be familiar with. Finance majors work with numbers generated by the accounting profession: income statements, balance sheets, cash flow statements, etc. Although finance practitioners don't need to know the intricate details of how these numbers were determined, they do need to know enough accounting to properly use these numbers in an analysis of financial problems. 3. Management provides the communication and organizational skills that all finance personnel need. Finance practitioners spend most of their day interacting with other people, so the ability to work effectively with others is crucial. 4. Marketing skills...
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...Career in Finance and Mathematics An B. Nguyen Grantham University BA550, Finance October 27, 2015 Abstract There is many job opportunity for individual with the career in finance or mathematics background. According to Careers-in-Finance.com, the lowest entry level related to finance start from $35K-$50K annually in small firms and can reach as high as $260K-$390K for large firms. The income can variable depended on the level of education and experiences. Around the finance corporate, there are numerous positions ranging from a financial analyst, who utilize the active/inactive data to generate the forecast that might impact company's profit, or a tax/audit officer who monitors/manage all account business activities to ensure compliance with federal tax regulations. Career in Finance and Mathematics In today’s society, almost everything happens in the world is driven by money and everything is affected by its value. Every adult also has to deal with some form of finance in their personal life, and if not properly manage, it can lead to catastrophe, i.e. bounce-check, bankruptcy or foreclosure, etc. In business operation, finance is the key element that will drive corporate to think harder, work leaner to save more, thus help corporate to achieve /retain more profit. Therefore, there are many positions that are available for the people with a knowledge of finance such as, Chief Financial Officer (CFO) and all accountant related personnel and financial analytical...
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...recently conducted a comprehensive survey that analyzed the current practice of corporate finance, with particular focus on the areas of capital budgeting and capital structure. The survey results enabled us to identify aspects of corporate practice that are consistent with finance theory, as well as aspects that are hard to reconcile with what we teach in our business schools today. In presenting these results, we hope that some practitioners will find it worthwhile to observe how other companies operate and perhaps modify their own practices. It may also be useful for finance academics to consider differences between theory and practice as a reason to revisit the theory. We solicited responses from approximately 4,440 companies and received 392 completed surveys, representing a wide variety of firms and industries.1 The survey contained nearly 100 questions and explored both capital budgeting and capital structure decisions in depth. The responses to these questions enabled us to explore whether and how these corporate policies are interrelated. For example, we investigated whether companies that made more aggressive use of debt financing also tended to use more sophisticated capital budgeting techniques, perhaps because of their greater need for discipline and precision in the corporate investment process. More generally, the design of our survey allowed for a richer understanding of corporate decision-making by analyzing the CFOs’ responses in the context of various company...
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...Course outline for BUSN85 STRATEGIC CORPORATE FINANCE, Fall 2014, 7.5 credits Introduction The main objective of the course is to further your understanding of the theory and econometrics of corporate finance beyond what is covered in previous courses in corporate finance (esp BUSN92 Empirical Corporate Finance). It is not necessary to have completed BUSN92 Empirical Corporate Finance (corporate finance students), nor BUSN80 Financial Econometrics and BUSN81 Theory of Corporate Finance (MSc finance students), but you are expected to hold equivalent knowledge of the theory and econometrics of corporate finance. The course emphasizes three perspectives: behavioral corporate finance, corporate governance, and microeconometrics. Behavioral corporate finance integrates psychology into the study of corporate financial decisions, while corporate governance focuses on implicit and explicit contracting, supervision, and control for ensuring accountability and reconciliation of conflicting interests. Microeconometrics, finally, refers to econometric tools for analysis of individual-level data on the economic behavior of individuals or firms. Assessment and grading The intention with the assessment is for you to give account for your knowledge and demonstrate your capacity to undertake the abilities you are expected to learn in the course. All assessment tasks must be carried out in English. In the grading, we make use of scoring system where you collect points on different assessment...
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...Corporate Credit Card Policy: • This Policy applies to all employees of the Agency who are assigned a Corporate Credit Card. • Conditions set out in this Policy, the relevant Cardholders’ Responsibility statement issued by the Bank govern the use of any Corporate Credit Card. • This Agency uses BB&T Visa Corporate Card. • Cardholders and their supervisors are responsible for ensuring that they adhere to the Corporate Credit Card policy, thereby ensuring adequate controls are exercised to minimize the risk that Corporate Credit Cards are used for fraudulent or corrupt purposes. Cardholders and their supervisors are referred to the Vice President of Finance for further information on their role in relation to fraud and corruption prevention. Eligibility • Permanent and temporary officers of Agency can apply for a Corporate Credit Card • Employees are eligible to be issued with only one (1) Corporate Credit Card. • To be eligible for a Corporate Credit Card, an employee must meet one or more of the following criteria: * travel frequently in the course of his/her duties or * purchase significant volumes of minor goods and services for use by the Agency or * incur regular frequent expenses of a kind appropriately paid by credit card Limits • Each Card will be limited to a maximum set by the Vice President of Finance, who will determine the limit on a basis of need and your cost center’s budget(s), and be for business expenditures...
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...16, 2011 Managerial finance includes a general outlook on the guiding principle and measures that correlate with corporate finance and management accounting. This form of finance focal points are assessment rather than on technique. Using adequate control of financial resources within a company or institute will provide that finical manger the ability to use those resources wisely. According to Lawrence Gitman, the responsibility of managerial finance is rest on the shoulders of the financial manager. Financial managers of an organization the duties and responsibility will include administrate economic functions throughout various forms of business. As stated above this form of financing is broken into two sections corporate finance and management accounting. Corporate finance involves planning financial issues and managing capital, future investments of the organization, how much of the profits shareholders shall receive, and finally is worth acquiring or merging with another firm (QuickMBA, 2011). Managerial accounting offers data to those who are directly in control of their companies venture (Accounting for Management, 2011). This section also centers on providing management with the kind of number to make good decisions for the company. An example of managerial financial would be a regional sales manager within a company structure who held accountable or the assets allocated to the region are used in the sales process. The manager use of funds set aside for promotional...
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...An Improved Pedagogy of Corporate Finance: a Constrained Shareholder Wealth Maximization Goal by Michael R. Santos , Gina Vega , John T. Barkoulas INTRODUCTION Bloom's taxonomy (1956) has guided pedagogical structure and innovation for half a century in the United States, and its focus on developmental learning remains relevant and instructive for us. The six developmental levels (knowledge, understanding, application, analysis, synthesis, and evaluation) separate basic knowledge acquisition from the critical thinking and analytical skills necessary for making ethical decisions or judgments. Answering questions about business ethics requires knowledge from multiple disciplines, including philosophy, psychology, political science, sociology, economics, finance, organizational management, and law. Analyzing such a vast body of data in ethical frameworks requires the highest levels (analysis, synthesis, and evaluation) of critical thinking as expressed in the taxonomy. Corporate governance, an interdisciplinary subject addressed in all these disciplines, explores the inter- workings of both for-profit firms and not-forprofit firms and is an area requiring business students to evaluate ethical issues when making decisions. Despite the broad responsibility of teaching corporate governance in the finance classroom, the pedagogy of finance has been restricted to ideas derived primarily from economics, statistics, and finance. Competing ideas from other disciplines are generally...
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...Project Finance By Godfred Kwame Abledu Abstract Project financing is largely an exercise in the equitable allocation of a project’s risks between the various stakeholders of the project. Indeed, the genesis of the financing technique can be traced back to this principle. Roman and Greek merchants used project financing techniques in order to share the risks inherent to maritime trading. A loan would be advanced to a shipping merchant on the agreement that such loan would be repaid only through the sale of cargo brought back by the voyage (i.e. the financing would be repaid by the ‘internally generated cash flows of the project’, to use modern project financing terminology). The purpose of this paper therefore is to provide an overview of Project Finance. The paper touched on the Motivation for the increased reliance on project financing to fund investments, advantages that project finance has over traditional corporate finance, the major short-comings of project finance and a typical project finance transaction. Table of Contents Assignment 1 1 Abstract 2 A. Introduction 4 B. Why is project financing being increasingly relied on to fund investments? 4 C. What advantages does it have over traditional corporate finance? 6 D. What are the major short-comings of project finance? 7 E. Typical Project finance Transaction 8 References 10 A. Introduction Unlike the traditional loan arrangements, project finance is a financial structure which facilitate the arrangements...
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...LEASE FINANCE Leasing is a medium- term funding facility in the form of an agreement by contract between a “lessor” and a “lessee” upon which the latter is entitled to use the lessor’s asset in return for regular payment of rental for a fixed period of time. At the end of the leasing period, the lessee has the option to buy the equipment from the lessor. Lease asset can be released also subject to acceptance of the terms offered. Lease Financing is the principal fund based activity of LankaBangla Finance Limited (LBFL). Until now the company concentrated only on full payout financial lease transaction for financing a wide range of capital machinery, equipment and vehicles. LBFL provides the following two types lease facilities: Key Features: * the lessee (customer or borrower) will select an asset (equipment, vehicle, software); * the lessor (finance company i.e. LBFL) will purchase that asset; * the lessee will have use of that asset during the lease; * the lessee will pay a series of rentals or installments for the use of that asset; * the lessor will recover a large part or all of the cost of the asset plus earn interest from the rentals paid by the lessee; * the lessee has the option to acquire ownership of the asset (e.g. paying the last rental, or bargain option purchase price);< i)FINANCIAL LEASE Financial leasing is the most common form of leasing. Through financial leasing businesses can finance the eventual ownership of equipment, unless...
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...• Cognizant 20-20 Insights How Cloud Computing Impacts Trade Finance Executive Summary As worldwide trade gradually recovers, the financial climate enablers remain challenging. Affordability, accessibility and adherence to newer, stricter Basel regulations stand as unabated hurdles in the path to rapid recovery of trade finance.1 According to a survey conducted by International Chamber of Commerce (ICC) in 2010, a total of about 42.9 million transactions were registered, representing a 5.81% increase over 2009 — a slight gain after the previous year’s fall. Technological innovations are bound to play a crucial role in accelerating the recovery process through the streamlining of front-end to back-end processes, enabling trade finance institutions to offer customized, low cost, value-added solutions that meet the requirements of geographically diverse customer segments. This paper discusses a key technological advancement, cloud computing, which is already making inroads at leading trade finance software players. This development enables a bank to build a strong trade finance architecture for maximizing profitability, a goal which starts with making such services more affordable and accessible to customers. Within trade finance and other corporate transaction banking services, financial institutions are moving ahead to reap the benefits from lower-cost private cloud services. These cloud services offer dedicated solutions with rigorous security controls, freeing both banks...
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