Advanced Financial Management MBA Third Sem SPPU

Syllabus

Course Code: 304 FIN

ADVANCED FINANCIAL MANAGEMENT

Unit 1                                                                                                                                                                                                       (6+2)

Corporate Restructuring & Corporate Valuation: Background of Restructuring and Reorganization; Concept of Financial Distress; Financial Statements Including Funds Flow and Cash Flow Statements; Importance of Cash Flows; Economic Value Added (EVA): Meaning, Components, Advantages & Drawbacks, Calculating EVA.

Unit 2                                                                                                                                                                                                       (7+2)

Capital Structure and Firm Value: Assumptions and Definitions; Net Income Approach; Net Operating Income Approach; Traditional Position; Modigliani and Miller Positio; Taxation and Capital Structure; Tradeoff; Signaling Theory; PBIT - EPS Analysis; ROI - ROE Analysis; Leverage Ratios; Guidelines for Capital Structure Planning.

Unit 3                                                                                                                                                                                                       (5+2)

Mergers and Acquisition: Types and Reasons for Mergers and Acquisitions. Legal Procedures for Mergers and Acquisitions Forms of Compensation. Anti-Takeover Strategies, Leveraged Buyouts, Portfolio Restructuring.

Unit 4                                                                                                                                                                                                       (9+2)

Working Capital Management: Determination of Level of Current Assets, Working Capital Financing by Banks; Cash and Liquidity Management- Aspects of Cash Management, Motives for Holding Cash and Marketable Securities, Cash Management Models, Strategies for Managing Surplus Funds; Credit Management: Objectives of Trade Credit, Credit Policies. Control and Collection of Accounts Receivables, Role of Factoring in Receivables Management (No Problems on Estimation of Working Capital).

Unit 5                                                                                                                                                                                                       (8+2)

Dividend Policy and Firm Value: Why Firms Pay Dividends; Factors Influencing Dividend Policy; Legal and Procedural Aspects; Bonus Shares and Stock Splits; Share Buybacks and Valuation; Dividend Policies in Practice; Dividend Models: Walter’s Model, Gordon’s Model, Modigliani and Miller’s Hypothesis; Models in Which Investment and Dividend Decisions are Related.