Financial Management | MBA 2nd Sem | Bangalore University

Syllabus

Course Code: 2.5

FINANCIAL MANAGEMENT

Module 1: Introduction to Financial Management                                                                      6 Hours

Concept of Financial Management - Meaning and Definitions, Scope of Financial Management, Finance Functions, Financial Goals of a Firm, Agency Problem, Emerging  Role of Finance Manager in India.

Module 2: Time Value of Money                                                                                                 6 Hours

Compounding, Continuous Compounding, Effective Rate of Interest, Discounting – Single Cash Flows & Series of Cash Flows, Annuity – Future Value and Present Value, Present Value of Growing Annuity, Perpetuity – Present Value, Present Value of Growing Perpetuity, Equated Annual Installments.

Module 3: Long-term Financing Decisions (Capital Structure Decisions)                               14 Hours

Sources of Funds: Short Term Sources, Long Term Sources, Venture Capital: Features, Stages and Types of Venture Capital. Factors Influencing Capital Structure, Benefit to Owners – EBIT –EPS Analysis, Point of Indifference, Financial Break-Even Point, Cost of Capital- Methods of Computing Cost of Capital: Cost of Equity Capital, Cost of Preferred Capital, Cost of Debt Capital, Cost of Internally Generated Funds, Weighted Average Cost of Capital (Theory and Problems), Leverages-Types and Measurement.

Module 4: Capital Budgeting Decisions                                                                                    14 Hours

Meaning of Capital Budgeting, Significance, Principles, Capital Budgeting Proposals, Methods of Appraising Proposals. Payback period, ARR, IRR, MIRR, NPV, Profitability Index, APV Method, Capital Rationing.

Module 5: Working Capital Management                                                                                 14 Hours

Concept of Working Capital, Factors Determining Working Capital, Sources of Working Capital, Estimating Working Capital Needs, Managing Cash, Marketable Securities, Debtors and Inventory.

Module 6: Dividend Decisions                                                                                                     6 Hours

Meaning, Theory of Relevance on Theory of Irrelevance. Walter’s Model, Gordon’s Model (Theory and Problems) Types of Dividends, Bonus Shares, Stock Splits.