Trimester 3 FINANCIAL MANAGEMENT Course code: 12MT31 Course Objectives: The course seeks to: Equip the students

ts to evaluate long term investment decisions. Expose them to corporate financing choices and dividend decisions Credits: 3.0 Total No. of sessions: 30

Course Content: Unit I: Introduction to Corporate Finance Function Scope Objectives Functions. Role of the finance manager in an organisation. Inter-linkage of finance function with marketing, operations and HR functions and decisions. Introduction to investment, financing and dividend decisions Unit II: Long Term Investment Decisions and Capital Budgeting Nature of capital expenditure decisions Need and importance of capital budgeting decisions Factors be considered in capital budgeting Methods of evaluating capital budgeting like traditional methods (Payback and ARR) and Modern methods (NPV, IRR and Profitability Index). Unit III: Cost of Capital Specific cost of capital like Cost of Debt, Preference, Equity and Retained earning Weighted average cost of capital. Capital Structure Decisions Optimal capital structure Factors influencing the capital structure decisions Leverages: Operating, Financial and Combined EBIT: EPS relationship Introduction to Theories of Capital structure. Unit IV: Dividend decisions - Introduction Factors affecting Dividend Policy Kinds of Dividends Concept of Bonus Shares & Rights Issue Relevance and Irrelevance Theories of Dividend like MM dividend theory, Walters Model, Gordon Model Dividend Policy & Indian Business practices. Unit V: Advanced Topics in Financial Management Working capital management Concept, estimation, factors and components like receivables, cash, inventory and cash management; Introduction to concept of Leasing in business decisions Reason for leasing, types of leasing, lease-buy financial evaluation. Text Books: 1. Prasanna Chandra, Financial Management, Tata McGraw Hill Publications, 7/e, 2009. 2. Richard Brealey, Stewart Myers, Franklin Allen, Principles of Corporate Finance, ISBN: 9780071263269, 2008. 3. IM Pandey, Financial Management, Vikas Publications, 9/e, 2006. Reference Books: 1. James C. Van Horne, Fundamentals of Financial Management, John M. Wachowicz, PHI Publications, 13/e, 2009 2. M Y Khan & P K Jain , Financial Management, Tata McGraw Hill Publications, 5/e, 2009 3. News paper Dailies like Economic Times, Business Line and Magazines like Business India, Outlook Business and Capital Market.