BMAN23000 Foundation Of Finance

Comprehensive notes on payout policies — dividends vs share repurchases, dividend smoothing, M&M dividend irrelevance theory, conservative & radical approaches, and market reactions to payout decisions.

Covers the basics of Options trading — Call & Put options, strategies like Straddle & Strangle, Put-Call Parity, pricing models like Binomial & Black-Scholes, hedging vs speculation, and key option pricing determinants.

Crisp notes on currency risk management, interest rate parity, purchasing power parity, Fisher effects, international Fisher effect, forward rates vs spot rates, and exchange rate determinants.

Breakdown of private & public equity financing, IPO mechanics, underpricing, SEO, debt financing types, bonds, debt covenants, callable/puttable bonds, and capital raising strategies.

Detailed notes covering Capital Budgeting, NPV calculations, WACC, cost of equity, and cost of debt. Ideal for understanding investment decisions and project evaluation frameworks.

Covers bankruptcy costs (direct & indirect), financial distress, trade-off theory for optimal capital structure, asymmetric information, and the pecking order theory for financing decisions.

Explains MM Proposition II — relation of leverage with cost of equity, effect of taxes, debt tax shield, WACC behavior with leverage, and limits of debt benefits in real-world scenarios.

Covers types of mergers (horizontal, vertical, conglomerate), reasons for M&A (synergies, diversification, tax benefits), valuation techniques, takeover defenses (poison pills, staggered boards, golden parachutes), hostile vs friendly takeovers, and leveraged buyouts. Also includes a detailed section on interest rate risk management, interest rate swaps, and hedging strategies for corporate finance.

These lecture notes cover essential topics in bond valuation, including valuing using yield curves, bonds with and without coupons, and zero-coupon bonds. Additionally, key definitions and market terminology are provided to enhance understanding of financial markets.

Focus on real options in project evaluation — timing, abandonment, expansion options, APV method, profitability index, and the link between real options and financial options like calls & puts.