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Summary BEC 442 CORPORATE FINANCE AND INVESTMENTS

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TABLE OF CONTENTS Course Outline i Copyright Notice iii Acknowledgement iv Module Overview v Module Objectives vi Unit 1. Corporate finance and value creation 1 Unit 2 Forms of business Organisations 5 TIME VALUE OF MONEY Unit 3: Future Value 11 Unit 4: Future Value Vs Compounding 16 UNI...

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  • June 9, 2022
  • 190
  • 2021/2022
  • Summary
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THE COPPERBELT UNIVERSITY

DIRECTORATE OF DISTANCE AND OPEN LEARNING




BEC 442
CORPORATE FINANCE AND INVESTMENTS




MR. CHONGO ALBERT.

© 2016




BEC 442: Corporate Finance & Investment

,Copyright Notice-CBU

,Acknowledgements

I am really grateful for the assistance in typing as well as putting the work together by Miss
Grace Mambwe. I would also sincerely thank my fellow lecturers in the Economics
departments for their valuable insights in this work.

, TABLE OF CONTENTS

Course Outline i

Copyright Notice iii

Acknowledgement iv

Module Overview v

Module Objectives vi

Unit 1. Corporate finance and value creation 1

Unit 2 Forms of business Organisations 5

TIME VALUE OF MONEY

Unit 3: Future Value 11

Unit 4: Future Value Vs Compounding 16
UNIT 5: Present Value and Discounting 22
Unit 6: Perpetuities 27
Unit 7: Annuities 30
Unit 8: Special Application for the Time Value of Money 36
Unit 9: Financing Decisions 43
Unit 10: Valuation of Common Stock 51

Unit 11: Earnings 60
Unit 12: Appraising Investment Opportunities 63
Unit 13: Risk and Return 72
Unit 14: Covariance, Correlation and Mean-Variance 76
Unit 15: Risk Free investment and Risky Investment 82

Unit 16: Efficient Frontier and CAPM 87

UNIT 17: Capital Structure and Pay-out Policy 92
Unit 18 Capital Structure and the Value of a firm 124

Unit 19 Pecking Order Theory 102

Unit 20: Pay out Policy and the Value of a firm 105

Unit 21 Clientele Theory 109
Unit 22: Efficient Market Hypothesis (EMH) 111

Unit 23: Equity Financing 120

Unit 24: Debt Financing 128
Unit 25: Leasing 139
UNIT 26: Options and Calls in Corporate Finance 145

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