Financial management

Paper Code: 
MBA 325
Credits: 
4
Contact Hours: 
40.00
Max. Marks: 
100.00
Objective: 

• To familiarize the students with the financial aspects of managerial decisions and to develop the skills to determine capital structure and other financial policies.

10.00
Unit I: 
Investment Decision

Investment Decision
Capital Budgeting Process, Basic Principles of Capital Expenditure Proposals, Various appraisal Methods-Average Rate of Return, Pay back Period DCF Methods. NPV, IRR and Profitability Index, Merits and Demerits of Appraisal Methods, Conflicts in Decision Making, Investment Appraisal Methods in Practice.

8.00
Unit II: 
Capital Structure

Capital Structure
Basic Issues, Irrelevance Approach, Relevance of Capital Structure Determination of Optimal Capital Structure, Features of Sound capital Structure, Planning the Capital Structure, Capital Structure Theories- Net Income Approach, Net Operating Income Approach, Traditional Approach, Modigliani- Miller Approach.

7.00
Unit III: 
Cost of Capital

Cost of Capital
Significance, Computation, Composite or Overall or Weighted Average and Marginal cost of capital

8.00
Unit IV: 
Dividend Policy Decision

Dividend Policy Decision
Introduction, Modigliani and Miller (MM) Hypothesis, Walter’s Model, Gordon’s Model, Determinants of Dividend Policy

7.00
Unit V: 
Leverage

Leverage
Meaning of Leverage, Operating Leverage, Financial Leverage, EBIT- EPS Analysis, Indifference Point, Combined Leverage
Finance software: Finacle.

Essential Readings: 

• C., V. H., & Wachowicz, J. M. (2010). Fundamentals of financial management (13th ed.). New Delhi: PHI Learning.
• Khan and Jain, Financial Management, Tata Mc Graw Hill, 7th edition 2014.
• Prasanna Chandra, Financial Management, Tata McGraw Hill, 2011.
• Paresh P. Shah, Financial Management, Biztantra Publication, 2007.

References: 

• Kothari & Dutta, Contemporary Financial Management, Macmillan India Ltd, 2008
• Ravi M Kishore, Financial Management, Taxmann’s,7th Edition, 2012.
• Dr.R.P.Rustagi, Elements of Financial Management, Taxmann’s, 10th Edition
• Ruzbeh J. Bodhanwala, Financial Management, Taxmann’s, 3rd Edition, 2009
• Randolph W Westerfield, Stephen A Ross, Bardford D Jordon, Fundamentals of Corporate Finance, Tata McGraw Hill, 8th Edition, 2007
• Kester, Case Problems in Finance, Tata McGraw Hill, 12th Edition, 2007

Academic Year: 
2016-2017
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