Financial Management (Theory)

Paper Code: 
24CDMK 402
Credits: 
4
Contact Hours: 
60.00
Max. Marks: 
100.00
Objective: 

This course will enable the students to develop the understanding of financial management concepts and capitalization decisions.

Course Outcomes: 

Course

Learning outcome

(at course level)

Learning and teaching strategies

Assessment Strategies

Course Code

Course

title

 

24CDMK 402

 

Financial Management

(Theory)

 

CO 124: Analyze capital budgeting techniques and various investment decisions based on it.

CO 125: Evaluate the assumptions of various capital structure theories.

CO 126: Examine the concept and explain cost of capital in detail.

CO 127: Analyze various dividend decisions in financial management.

CO 128: Develop an understanding of leverage and concepts related to it.

CO 129: Contribute effectively in course-specific interaction

 

Approach in

teaching:

Interactive Hours, Discussion, Tutorials, Reading assignments

 

Learning activities

for the students:

Self learning assignments, Effective

questions, presentation, Solving problems of unsolved questions

Class test, Semester end examinations, Quiz, Assignments, Presentation, Individual and group projects

 

12.00
Unit I: 
Investment Decision:

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

12.00
Unit II: 
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.

12.00
Unit III: 
Cost of Capital:

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

12.00
Unit IV: 
Dividend Policy Decision:

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

12.00
Unit V: 
: Leverage:

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

Essential Readings: 

1. M.Y. Khan & P.K. Jain: Financial Management Text Problem and Cases, Tata McGraw Hill Pubilshlng Co. Ltd.
2. R. P. Rustogi: Financial Management: Theory Concepts and Practices, Taxmann Publication.
3. I.M. Pandey: Financial Management: Theory and Practices, Vikas Publishing House

References: 

1. R.A. Brealey, S.C. Myers, F. Allen& P. Mohanty: Principles of Corporate Finance, McGraw Hill Higher Education
2. J.V. Horne & J.M. Wachowicz: Fundamentals of Financial Management Prentice Hal
e-Resources:
1. https://www.expresslibrary.mheducation.com/bookshelf
2. MS-109.pdf (uou.ac.in)
Journals:
1. http://publishingindia.com
2. http://www.oiirj.org
3. http:// sagepub.com

Academic Year: 
2024-2025
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