Syllabus

Fundamentals of Financial Management 2

Credit units Code Facilitator Office 3 units MAN2102 Mamduh M. Hanafi, MBA, PhD South-wing building, third floor Faculty Economics and Business, Universitas Gadjah Mada Yogyakarta, Indonesia 55281 Phone : +62 274 548510 ext. 171 e-mail : mamhan02@yahoo.com, mamduhmh@ugm.ac.id by appointment MAN2101 The course is the continuation of Financial Management 1 course which introduces students to the concept of financial management of business corporations. Therefore it starts with the review of some fundamental concepts on financial management regarding the concept of value and risk. Then the role of shareholders in large corporation is discussed particularly in corporate governance context and how to obtain financing through venture capital and initial public offering (IPO). How much firm should borrow (financing decisions) is discussed in capital structure theories followed by payout (dividend) policy. Since financial transactions in corporation are recorded in financial statements, financial analysis and planning based on those statements follows the discussion. Special topics in corporate finance, - mergers, international financial management, option, and risk management -, are also discussed. Finally it ended with the conclusions, what we know and do not know in finance. After completion of this course, students are expected to be able to: 1. Understand the role of shareholders in large corporation and in the context of corporate governance. 2.Explain how to obtain external financing through venture capital and IPO. 3.Distinguish concepts, advantage and

Consultatio n Time Prerequisite Course Description

Learning Objectives

disadvantage types of capital sources for firms in different characteristic of risk and return, and industries. 4.Understand capital structure theories and payout policy, evaluate and make decision based on the theories 5.Analyze and plan financial conditions of corporation based on financial statement information. 6.Analyze special topics in corporate finance, i.e. mergers, international financial management, option, and risk management. Book and Reading Material Students Responsibili ties
1. Brealey, Richard A, Stewart C. Myers, and Alan J.

Marcus. (2010), Fundamentals of Corporate Finance. 6th ed., McGraw-Hill, International Edition. 2. Additional materials will be distributed later. Class participation. Students are highly expected to contribute ideas, thoughts, experiences, and argument to the class discussion. Although overviews of key points and issues will be provided, we strongly recommend that students comprehend the materials in details, raise questions and ideas, and create a lively class, meaning that you must read and prepare readings assigned prior to coming to the class. Besides, students are encouraged to raise comments on, questions, or critiques to the other presenting groups. Predicted on FEB UGM regulation, students are required to attend 100% of total lectures held. Any violations against this rule may render the final grade penalized.
Academic misconduct/dishonesty (cheating and plagiarism) would lead to serious academic penalty. Students are expected to behave as a mature and decent people.

Absenteeis m
Academic conduct and behavior:

Learning method

An experiential approach. Continuously and consistently, students are assigned to construct experiential observations on managerial cases and practices, and subsequently report the findings to the instructor. Internet exploration. Students are encouraged to harness the advancement of information technology in exploring knowledge and opportunities. Remember that in current circumstances, a clever person is not she being able to answer all questions; rather, it knows where to find answers.

Case analysis. Student will be randomly distributed into groups. Besides functioning as a discussion forum, the group is required to submit a case write-up presentation. It is expected that the student works diligently on these cases so as to apply theoretical concepts to real problems and develop students analytical and problem solving skills. The length of the case write-up must not exceed ten pages of A4-sized paper, not including figures, tables, charts, or other appendices. The report has to be typewritten with 1.5-spaced text system. Quantitative analysis supporting recommendations may be attached in appendices whilst figures, table, or charts summarizing the quantitative analyses can be included in the text. Grading will be based on five criteria: (1) clarity, (2) completeness, (3) conciseness, (4) correctness, and (5) consistency. Late submissions will not be accepted without prior approval of the lecturer. All request for extension should be directed to lecturer(s) by e-mail at last two days before due date for submission. Extensions will be granted for medical reasons upon receipt of medical certificate, or in exceptional circumstances in consultation with the individual lecturer. Examinations. Mid-term and final test purport to examine students knowledge and understanding on concepts learnt in the lectures. Grading WEIGHT SCORE: Assignment and Class participation : 20% Quiz : 20% Mid-Term Exam : 30% Final Exam : 30% Grading range: > 90 A, 70-90: B, 50-70: C, 40-50: D, <40 E

Topics and Learning Goals

Sessi on 1. 2. 3. Topic(s)
Overview of Financial Management 1 Introduction to Corporate Financing Venture, Capital, IPOs, & Seasoned Offerings

K A V V V

Learning Goals R Co Cl Ld E S S s s C V V V V V V

I C

Source s BMC 1 -13 BMC 14

BMC 15

4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.

Debt Policy Payout Policy Long-term Financial Planning Short-Term Planning Working Capital Management Mergers, Acquisitions, and Corporate Control International Financial Management Options Risk Management What We Do and Do Not Know About Finance Current Issues in Corporate Finance and Summing up of the all Topics

V V V V V V V V V V V

V V V

V V

BMC 16 BMC 17 BMC 18 BMC 19 BMC 20 BMC 21

V V V V V V V V

V V V V

BMC 22 BMC 23 BMC 24 BMC 25 TBA

KA = Knowledge acquisition; RS = Research Skill; CoS = Communication Skill ClS = Collaborative Skill; LdS = Leadership Skill; EC = Ethical Conduct; IC = Innovative Capability

Learning Outcome, Cognitive Objectives, and Types of Assessment

N o 1 Learning Outcome Cognitive Where Objectives to Measur A A K C S E e p n How to Measure Questions require students to describe concept and theories. Class discussion requires students to describe, explain provide example external financing, especially from venture capital and IPO. . Written report paper and team presentation in analyzing, evaluating, and distinguishing many types of capital sources with regard to different industries characteristics. Written report paper and team presentation in estimate cost of capital and valuate assets. Written report paper and team

Understand the role of shareholders in large corporation V V and in the context of corporate governance. Describe and explain how to obtain external financing through venture capital and IPO. V V V

Exam

Course embedd ed discussi on

Distinguish concepts, advantage and disadvantage types of capital sources for firms in different characteristic V V V industries.

Course embedd ed case study

Understand capital structure theories and payout policy, evaluate and make decision based on the theories Analyze and plan financial conditions of corporation

V V V

Course embedd V V ed case study V V Course embedd ed case

V V V

based on financial statement information.

study

6.

Analyze special topics in corporate finance, i.e. mergers, international financial management, option, and risk management.

V V V

Course embedd V V ed case study

presentation in analyzing selected case of firms in particular industries. Written report paper and team presentation in analyzing selected case of particular firms in different conditions and situations.

K = Knowledge; C = Comprehension; Ap = Application; An = Analysis; S = Synthesis; E = Evaluation.