Module 1:
Financial management – Introduction to financial management, objectives of financial management – profit maximization and wealth maximization. Changing role of finance managers. Interface of Financial Management with other functional areas. Indian financial system – Primary market, Secondary market – stocks & commodities market, Money market, Forex markets. Sources of Financing: Shares, Debentures, Term loans, Lease financing, Hybrid financing, Venture Capital, Angel investing and private equity, Warrants and convertibles
Module 2:
Time value of money –Future value of single cash flow & annuity, present value of single cash flow, annuity & perpetuity. Simple interest & Compound interest, Capital recovery & loan amortization.
Module 3:
Cost of Capital Cost of capital – basic concepts. Cost of debenture capital, cost of preferential capital, cost of term loans, cost of equity capital (Dividend discounting and CAPM model). Cost of retained earnings. Determination of Weighted average cost of capital (WACC) and Marginal cost of capital.
Module 4:
28 Investment decisions -– Investment evaluation techniques – Net present value, Internal rate of return, Modified internal rate of return, Profitability index, Payback period, discounted payback period, accounting rate of return. Estimation of cash flow for new project, replacement projects.
Module 5:
Working capital management – factors influencing working capital requirements. Current asset policy and current asset finance policy. Determination of operating cycle and cash cycle. Estimation of working capital requirements of a firm (Does not include Cash, Inventory & Receivables Management)
Module 6:
Capital structure and dividend decisions – Planning the capital structure. (No capital structure theories to be covered) Leverages – Determination of operating leverage, financial leverage and total leverage. Dividend policy – Factors affecting the dividend policy - dividend policies- stable dividend, stable payout. (No dividend theories to be covered).
Module 7:
Emerging Issues in Financial management: Derivatives, Mergers and Acquisitions, Behavioural Finance, Financial Modelling, Financial engineering, risk management.
Practical Components:
• Identifying the small or medium sized companies and understanding the Investment
evaluation techniques used by them.
• Using the annual reports of selected companies, students can study the working capital management employed by them. Students can also compare the working capital management of companies in the same sector.
• Students can choose the companies that have gone for stock split and Bonus issue in the last few years and study the impact of the same on the stock price.
