SYLLABI PART D CORPORATE FINANCIAL MANAGEMENT

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  1. 1.AIM
  2. LEARNING OUTCOMES

The aim of this module is to address the need for the Chartered Secretary to be knowledgeable and competent in the skills of corporate financial planning, and in understanding the impact of the fiscal environment on the organization and its decision making.

At the conclusion of this module, the candidate will be able to:

  • Understand the financial sources and requirements of the employing client organization.
  • Understand the role and efficiency of the capital markets.
  • Understand the nature and importance of capital structure and the cost of capital.
  • Understand the impact of global and multi-national operations on corporate financial management.
  1. PRE-REQUISITE LEARNING

Evidence of assessed pre-requisite knowledge and understanding in the following disciplines must be demonstrated through the Institute’s examinations, or those of equivalent qualifications which have been approved as meeting the Institute’s required curriculum and standards:

  • Financial Accounting
  • Cost Management Accounting
  • Corporate Law
  • General and Strategic Management
  1. LEARNING CONTENTASSESSMENT SCHEME
    1. 1.Financial Objectives and Requirements
    2. 2.Sources of Finance
    3. 3.Share and Loan Capital
    4. 4.Capital Structure, the Cost of Capital
    5. 5.Working Capital Management
    6. 6.Capital Investment Appraisal
    7. 7.Business Restructuring
    8. 8.International Aspects
  2. RECOMMENDED READING

The financial objectives of the main types of organization: public and private limited companies, statutory companies, trusts, and companies limited by guarantee. Determination of financial requirements and their impact on business planning and decision taking. The role of financial audit.

Financial markets: role of the New Issues Market and Stock Exchange, including the Alternative Investment Market. The operating institutions on the markets. Influence of Markets on market decisions. State funding, corporate donations, sponsorship, grants, subscriptions, fund raising sources.

The raising and maintenance of share capital: issue pricing and methods. Authorised and issued capital. Dividend policy, including scrip dividends and share re-purchases. Finance and loan capital. Domestic and international sources. The nature of debt. Corporate debentures and debenture stock, convertibles, warrants. Bank loans and overdrafts. Retention and self-generated finance.

Costs of individual types of finance. Weighted average cost of capital. Portfolio theory and the Capital Asset Pricing Model. The cost of capital. Capital gearing. Capital structure theory and decisions.

Working capital and its importance. Planning and control of cash and marketable securities, debtors, current liabilities and stock. Future expansion and contraction.

Payback, Net Present Value, Internal Rate of Return and their comparisons. Implications of taxation and inflation. Capital rationing. Capital budgeting under uncertainty. Lease or buy decisions.

Business expansion and financial growth. Sources of expansion and contraction. Restructuring strategies: bids, acquisitions and mergers, capital reconstructions. Divestment: sell-offs, spin-offs, management buyouts. Business failure, prediction and rescue packages.

Multi-national operations. Managing exchange risk. The foreign investment decision. Financing overseas investment.

Three hour examination paper

Van Horne JC (2004) Financial Management and Policy (12th Edition) Prentice Hall of India New Delhi
Porton M (2007) Corporate Financial Management ICSAZ Harare
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