COURSE-OUTLINE Quaid-e- Azam university School of Management sciences

Spring Semester, Academic Session 2014 Course Title: Advanced Financial Managemnt Class: MBA

Prerequisites: Financial Accounting, Management Accounting Financial Management, Principles of Economics Mode of Delivery: Face-to-Face Contact Details +92 343 5000087 Farooqbaloch76@gmaill.com

MPORTANT NOTE: This course syllabus is a working outlines for our semester. It is your responsibility to read everything stated in this document and meet all the requirements in order to complete the ( Advanced Financial Management) course successfully. If you do not read the whole course outlines and do not meet the requirements entailed therein, you will take the responsibilities for any misunderstanding, misinformation, or anything that may affect your grade.

Advanced Financial Management: COURSE DESCRIPTION: Advanced Financial Management The aim of this course of study is to broaden the theoretical and analytical skills of students with respect to the funding and investment decisions made by senior finance executives. The learning objectives of the course are to Collect, interpret and analyse financial data relating to a number of key concepts regarding fund raising and capital structure in a variety of business contexts and their impact in different international financing scenarios. It also aims to Compare, contrast and evaluate merger proposals, lease and project financing proposals especially in an international financial management setting. One of the key objectives of the course is to identify measure and manage the financial risks faced by corporate particularly multinational companies. COURSE OBJECTIVES Course Objectives: At the end of the semester students should have an understanding of: Roles of senior finance executives particularly in Multinational context Corporate governance issues and agency theory Advanced investment appraisal techniques particularly Adjusted present value and option valuation method Valuation of companies particularly in case of merger and acquisition Identification, measurement and management of currency risk Interest risk management particularly multinational companies by using derivative instruments: options, futures and swaps Overview of Islamic financing Recent financial management Issues such as Dark Pool trading, behavioral finance

METHODS OF LEARNING A variety of techniques will be used to enhance participants learning for this course. Therefore, face-to-face lecture, classroom discussions of assigned material, case study discussions, team presentations, guest 2

lectures and active learning exercises. You are expected to come to every session having completed your reading and/or other assignments. COURSE EVALUATION Though much of the learning is actually achieved in-class, students are expected to complete the certain assignments and exams in order to pass the subject. The assessment, set out below, is designed to evaluate the outcomes. 1. FINAL EXAMINATION (Centrally Conducted) 2. COURSE WORK 75 (3 hours) 75

Quizzes FINAL PROJECT OR PRESENTATION MID TERM EXAMS (Centrally Conducted)

25 25 25

OVERVIEW OF 15 WEEKS SEMESTER SCHEDULE Weeks Week 1 Scheduled Topic Course Overview Advanced Appraisal Methods Overview of basic appraisal techniques Introduction of Advanced appraisal techniques such as Duration Weaknesses of Internal rate of return Modified Internal rate of return Calculation and Application of Weighted average cost o capital Need for Risk Adjusted WACC Class Activities Formation (not more than three)

Week 2

Weeks

Scheduled Topic Beta Asset Leveraged Beta Hamda equation

Class Activities

week 3

Adjusted present value (APV) Rationale of APV Mechanism of APV Advantages of APV Dis Advantages of APV Case study relating to APV

Week4 Risk and uncertainty in Investment Appraisal Risk and uncertainty Sensitivity Analysis Decision Tree Simulation Capital Rationing Hard Vs Soft Rationing Single period Capital Rationing Multi period Capital Rationing Linear programming Simplex method Dual Value Week 5 Introduction of Derivative & Real Option Valuation Introduction of derivatives Types of derivatives Application of derivative products Types of options Cost of options, Black Scholoes valuation method Options to defer Options to abandon Options to sell Investment appraisal in international context International Tax treaty 4

Week 6

Weeks

Scheduled Topic International CAPM Purchasing Power Parity Interest Rate Parity Capitalization rate in context of multinational companies Appraisal in case multinational companies

Class Activities

Week 7

Risk& Return Defining Return, Defining Risk, Expected Return Using probability Distributions to Measure Expected return Discrete Probability Distribution, Normal probability Distribution, Risk Calculation of a single security Portfolio return and risk Expected return of portfolio Diversification systematic and unsystematic Risk introduction to capital Asset pricing model, Market efficiency hypothesis, The systematic Risk Index, The Security market Line, Find Required rate of return by using CAPM, the Concept of Under priced And Overpriced stocks Capital structure Debt versus Equity Capital Structure And Financial Leverage Financial Leverage and Risk Capital Structure and Taxes Capital structure theories Valuation of Mergers and Acquisitions Mergers, takeover and acquisition Asset based valuation Earning based valuation Market based valuation Free Cash based valuation

Case: Discussion on problems

Week 8

Mini Case study on Time Value of Money:

Week 9

Weeks Week 10

Scheduled Topic Currency risk management Currency risk Types of currency risk Money market hedge Forward hedge Future hedging Options hedging Options strategy to manage currency risk Multilateral netting Matching Leading and lagging Introduction to swaps Foreign swaps Currency swaps Interest Rate Risk Management Interest risk and its types Gap Analysis Yield curve theory Forward rate agreement Future contracts Options strategies for interest risk hedging Interest Swaps Swapations Collar hedging

Class Activities

Week 11

Week 12

Week 13

Week 14

International transfer pricing Dividend theories Practical dividend policies Divisionalised companies Transfer pricing Objectives of transfer pricing Transfer pricing for MNCs Over view Islamic Finance Differences between traditional and Islamic finance Concept of Riba Ijra Mudarbah 6

Week 15

Weeks Murabha Musharka Sukook Week 16

Scheduled Topic

Class Activities

Corporate Restructuring Predicting corporate failure Models to predict corporate failure Capital restructure schemes for failing companies Capital restructure schemes for solvent companies

IMPORTANT NOTICE: Please note that this is a tentative outline and changes can be made, depending on the progress. However, the timeframe of the class activities; assignments and final project are fixed and no changes will be made. REQUIRED COURSE MATERIALS Recommended Text Book(s): Intermediate Financial management by Brigham 8th edition Advanced Financial Management by Emile Wolf Reference Book(s): Managerial Finance by Gitman Applied corporate finance by Damudran International corporate finance by Madura Investment Analysis and Portfolio Management by Reilly and Brown Web http://www.finpipe.com, http://www.financewise.com http://www.finance.yahoo.com Journal(s): Journal of corporate finance Journal of Finance 7

Journal of portfolio Management PLAGIARISM Plagiarism is an attempt to pass someone elses work off as your own. This is an issue that the Department of Business Administration takes very seriously. Honesty and integrity are critical attributes in both our professional and personal lives. It is expected from you to maintain a very high standard of academic honesty. Plagiarism may result in a grade reduction or other penalties as described in University Code. CLASS RULES Your enrollment in this course indicates your agreement to follow the class rules. This means: Be on time to class and dont leave early Be quiet when someone else is officially speaking Dont read newspapers or do outside work in class Leave the classroom as clean or cleaner than you found it. Keep your mobile switched off during lecture hours