I MBA THIRD TRIMESTER - JAN- MAR 2013 FINANCIAL MANAGEMENT -MBA 333

Faculty- Latha Ramesh M.Com, MBA, ACMA Mobile No. 9886870397: E-mail: latha.ramesh@christuniversity.in Code-MBA 333 Course plan

Syllabus

Break up of Topic

Date

Unit 1
Module 1

OVERVIEW OF CORPORATE FINANCE (2)

Scope of finance, Finance functions, Financial Managers role,

Week1

Module 2

Profit Maximization vs. Wealth Maximization, agency cost Organization of finance function. Week2 TIME VALUE OF MONEY (5) Time preference for money- required rate of return Compound interest

Unit 2
Module 1

Simple interest & Week1

Module 2 Module 3 Module 4 Module 5

Future value of a single cash flow & Annuity- sinking fund Week2 Present value of a single cash flow- present value of annuity- loan amortisation (capital recovery factor) Week2 present value of perpetuity- PV of uneven cash flow- annuity due Week2 Stated vs. Effective rate of interest Week3 INVESTMENT DECISION (6) Objectives: Nature of Investment Decision, Type of investment decisionInvestment Evaluation criteria Week3 NPV-evaluation of NPV method- IRR-Profitability Index- payback period-Accounting rate of return Week3 Determining Cash Flows for investment analysis: Cash Flows v/s Profitincremental cash flows- components of cash flows- net working capitalfree cash flows& terminal cash flowsweek4

Unit 3
Module 1

Module 2

Module 3

Module 4 Module 5 Module 6

cash flow estimates of new product-salvage value and tax effects Complex investment decisions: Projects with different lives Annual equivalent value method
Mid Tem (CIA1) Units 1,2 and 3 and Unit 4 Module 1

week4 week4 Week5

Unit4

COST OF CAPITAL (5 Hours) significance- concept of opportunity cost of capital-components- cost of debt- tax adjustment- cost of preference share Week5 cost of equity capital- dividend growth of capital- book value Vs of equity Week5 CAPM model-- weighted average cost model- PE ratio and cost market value weights week6 flotation costs- cost of capital and investment analysis divisional and project cost of capital- the pure play technique CAPITAL STRUCTURE AND DIVIDEND POLICY (6 Hours) Financial and operating leverage-EPS& ROE calculation- analysing alternative financial plans Analysing alternative financial plans-constant and varying EBITcalculation of indifference pointcapital structure theory- the Net income and traditional views- The MM proposition- Agency costs- Pecking order theory The framework of capital structure- FRICT analysis-practical considerations in determining capital structure Dividend policy- issues-dividend relevance Walter model& Gordon model-the bird in hand argument Dividend irrelevance- MM hypothesis WORKING CAPITAL MANAGEMENT(4 Hours) concept- liquidity management-operating and cash conversion cycle-estimation of working capital investment-needs permanent and variable working capital-determinants of working capitalestimating working capital receivables management- Analysing change in credit standards-change in credit period policy-analysing cash discount decisioncash management- facets-optimum cash balance- Baumol model & Miller Orr model SPECIAL TOPICS (2) long term finance- IPO,FPO, rights issue, private placements, corporate governance Venture capital - international sources of finance, ADR,GDR *Text book: Panday, I.M, Financial Management, (10th ed.). Vikas publications New Delhi: Reference Book: week6 week6

Module 1 Module 2 Module 3 Module 4 module 5

Unit 5
Module 1 Module 2 Module 3 Module 4 Module 5 Module 6

week 7 week 7 week 7 Week 8 Week 8 Week 8

Unit 6
Module 1 Module 2
Module 3 Module 4

Week 9 Week 9 Week 9 week 10

Unit 7

week 10 week 10

Shah Paresh, Financial Management , New Delhi: Biztantra Publications

Banerjee A.S.K, Financial Management, New Delhi: S.Chand & Co. ASSESSMENT PATTERN: CIA1- (Mid term) - 50 Marks CIA2- (Pre- Midterm)- 20 Marks Moodle quiz, group assignment, individual assignment and class participation CIA3- (Post mid term)- 20 Marks Individual 3 will have multiple components and the weightage will be CIA2 and assignment, group project and class participation. informed just before the finalisation. Hence the students are expected to GENERAL GUIDELINES Please be present in the class well before the start. Late coming is not entertained Bring your text book , calculator and notebook everyday of your scheduled class. Laptop may be required on the days of practice with Excel. Class participation is one of the main components of your CIA and hence you are expected to come well prepared for every class. Repeated delinquencies will attract penal actions. You are free to contact me in my mail id, phone number and even personally meet me in cabin with prior appointment for any clarification of the subject matter. The research articles given in the course plan will be given to you from time to time.

Pedagogy

Chapters in the *Text book Assignments Financial decision of a 1 company Anandnagar Electricity 1 Company

Additional reference

Case

Prowess database Prowess database

case

numerical numerical
numerical

practical 2 project moodle 2 exercise

2 Excel exercises 2 Excel exercises 2 DHPL 8

numerical numerical & case study

numerical moodle assignment

8 8

prowess database

numerical

10

numerical case practical project

10 11 11

Group presentatio n Income tax India website

discussion PPT and assignments discussion practical project discussion

9 research article Proquest prowess 9 9

database be

to 9 announced

discussion numerical discussion discussion discussion discussion

14

14 15 research article proquest 15 research article proquest 17 research article proquest 17 research article proquest

discussion numerical numerical numerical

27 27 28 30

practical project

presentation presentation

20,21,22,35 23,34