Indian Institute of Management Kozhikode

Executive Management Education Programme -09 (eMEP-

09)
Financial Management - I
Instructor: Abhilash S. Nair Hours: 27
Telephone: (0495) 2809248 email: abhilash@iimk.ac.in

Course Background

Financial Management, as one of the functional areas of business management, concerns

basically with managing the cash flows of the entire business. Hence by implications, at
the operational level, it manifests as a supportive function; but at the corporate level, it
assumes strategic importance as it is charged with the responsibility of maximizing the
value of the firm. This course is structured in order to study both these aspects.

The course will mainly focus on the three key corporate financial decisions viz., the
Investment decision, the Financing decision and the Dividend decision. Besides the three
key corporate finance decisions, the course will also cover some advanced issues in
valuation, issues related to mergers and acquisitions, international finance and risk
management.

Learning Outcomes

The course aims at developing a clear understanding of the concepts and techniques
involved in managing the finance function of a corporation.
At the end of the course, the students should be able to:
• Analyse relevant factors that have bearing on the investment, financing and
dividend decisions.
• Discuss the issues involved in value based management.
• Identify the issues involved in mergers, acquisitions and corporate valuations.
• Determine the managerial actions relating to risk management and international
financial management.

Assessment

Quizzes 30%
End Term 50%
Assignments 20%
Readings

Text Book

Prasanna Chandra, Financial Management: Theory and Practice, 6e, TMH, New Delhi

Reference Books

Pandey, I M, Financial Management, 9e, Vikas Publishing House, New Delhi (IMP)
Brealey and Myers, Principles of Corporate Finance, 7e, T MH, New Delhi (BM)
Ross, Westerfield and Jaffe, Corporate Finance, 7e, TMH, New Delhi (RWJ)
Aswath Damodaran, Corporate Finance, John Wiley and Sons, Singapore (AD)
IM Pandey and Ramesh Bhatt, Cases in Financial Management, 2e, TMH, New Delhi
(PB)

Session Plan
No. Of Topic Text/Reading/Case/Exercise
Sessions
2 Time Value of Money Text : Chapter 6
Exercise Problems : 22, 26, 27, 29 to 31
Minicase at the end of the chapter.
2 Financial System Text : Chapter 2
Risk and Return Text : Chapter 8
Exercise Problems : 3 to 5, 8
2 Cost of Capital Text : Chapter 14
Exercise Problems : 2,8,11
Minicase at the end of the chapter.
2 Techniques of Capital Text : Chapter 11
Budgeting Exercise Problems : 1, 2
2 Estimation of Project Cash Text : Chapter 12
Flows Minicase at the end of the chapter
2 Replacement Decision Case : Mechanical Drying Equipment Ltd.
(PB)
2 Some Issues in Capital Text : Chapter 13
Budgeting
2 Capital Structure and Firm Text : Chapter 19
Value Exercise Problems : 5,7,8
Capital Structure Decision Text : Chapter 20 (Sections 20.1 to 20.4)
Exercise Problems : 1,3,4
2 Leasing as a source of Class Notes
Financing
Leasing Case : Vishal Engineering Ltd.