FM-E10

FM-E10
(EPWP 2010-11 : Term-III)

Financial Management
(Instructor: Prof. S. G. Deb)

COURSE OUTLINE

A. Objective :
A basic knowledge of Finance is compulsory for aspiring managers, independent of the functional area of specialization. The last decade has seen fundamental changes in financial markets and financial instruments. Electronic and print media are constantly engrossed with issues like financial restructuring, initial public offerings, bankruptcy, dividends, bonuses, and many more. This course on Financial Management is aimed at providing a broad overview of the world of business from a financial manager’s perspective. At the end of the course the participants should be having a brief idea about what financial managers do and why they do, and should be better equipped to respond to the fast changing dynamics of the business environment.

B. Readings :
1) Textbook:

Principles of Corporate Finance: by Megginson, Smart and Gitman, South Western (Indian Edition by Cengage Learning), latest edition.

3) Reference Book:

- Financial Management: Theory and Practice –11th Edition by Brigham and Ehrdart, Thomson India edition

- Principles of Corporate Finance - 8th Edition, by Brealey, Myers, Allen and Mohanty, Special Indian Edition, Tata Mcgraw Hill

-Fundamentals of Corporate Finance by Ross, Westerfield and Jordan, latest edition, Tata Mcgraw Hill.

3) Class PPTs and handouts and other readings as and when made available during the course.

Tentative Session Plan :

Session
Topics Covered

1
· Introduction : Core issues in Corporate Finance
· Time Value of money

2
Application of time value of money concepts to value debt securities like bonds :

3
Application of time value of money concepts to value common stocks

4,5,6
Risk, Return and Capital Markets
· Concepts of risk and return in isolation (single period, multiperiod, return distribution)
· Concept of risk and return in a portfolio context
· Market Efficiency
· Beta
· CAPM

6,7,8
Capital Budgeting :
· Basic Decision Criteria
· Cost of Capital
· General rules to be followed for getting the correct cash flows
· Deriving the Cash Flows from accounting numbers and applying to make a decision
· Capital Budgeting under uncertainty, risk analysis, ( Sensitivity analysis, scenario analysis, simulation approach, breakeven analysis,

Pedagogy :

Interactive class lectures, numerical problem solving, short case problem solving, and other assigned readings. Assignments/numerical problems will be given to students on a regular basis after class sessions, and students would be expected to come prepared with the assignments in the next class.

Evaluation:

The evaluation process is divided into two components.

(a)Assignment : 40% : A take home assignment will be set which will be group exercise . The students will be required to complete the assignment and submit within a specified time limit.

(b) End Term: 60% : The end term examination will be an open book one based on topics covered during the entire course .

Good Luck!

Created By: Bijoy Kar on 07/26/2010 at 07:35 PM
Category: EPWP Doctype: Document

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Session	Topics Covered
1	· Introduction : Core issues in Corporate Finance · Time Value of money
2	Application of time value of money concepts to value debt securities like bonds :
3	Application of time value of money concepts to value common stocks
4,5,6	Risk, Return and Capital Markets · Concepts of risk and return in isolation (single period, multiperiod, return distribution) · Concept of risk and return in a portfolio context · Market Efficiency · Beta · CAPM
6,7,8	Capital Budgeting : · Basic Decision Criteria · Cost of Capital · General rules to be followed for getting the correct cash flows · Deriving the Cash Flows from accounting numbers and applying to make a decision · Capital Budgeting under uncertainty, risk analysis, ( Sensitivity analysis, scenario analysis, simulation approach, breakeven analysis,