Unit V: Financial Management

Categories: Management

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Course Content

Financial Management
Financial Management: Concept and Functions

Burn Rate & Runway
Cost of Equity
test
F: Mix
F: Functions of Finace and Financial Markets
F: Shiller PE / CAPE Ratio

Capital Structure
Capital Structure: Theories, Cost of Capital, Sources, and Finance

What is Cost of Capital?
Capital Structure Theories
Net Income Approach
Net Operating Income (NOI) Approach
F: Sources of Finance/ Capital Structure
F: Equity Market
F: Capital Structure Theories
F: Cost of Capital
F: Net Income Approach
F: Net Operating Income Approach of Capital Structure
F: Cost of Equity Modes
F: Pecking Order Theory of Capital Structure

Budgeting and Budgetary Control
Budgeting and Budgetary Control: Types and Process, Zero-base Budgeting

Leverages
Leverages: Operating, Financial and Combined Leverages, EBIT–EPS Analysis, Financial Breakeven Point & Indifference Level.

Value & Returns
Value and Returns: Time Preference for Money, Valuation of Bonds and Shares, Risk and Returns

Capital Budgeting
Capital Budgeting: Nature of Investment, Evaluation, Comparison of Methods, Risk and Uncertainty Analysis

Steps involved in Capital Budgeting Analysis
NPV : Capital Budgeting Technique
Merits of Internal Rate of Return Method of Capital Budgeting
F: NPV–IRR Conflict / Project Ranking Problems
F: Capital Budgeting Evaluation: NPV
F: Capital Budgeting Methods
F: Capital Budgeting Analysis
F: IRR
F: Methods of Risk Analysis
F: Capital Budgeting Process
F:Certainty Equivalent (CE) approach of Risk Analysis

Dividend
Dividend: Theories and Determination

📘 Gordon Growth Model (Variant of Dividend Discount Model – DDM)
Modigliani and Miller (MM) Dividend Irrelevance Theory
Modigliani and Miller (MM) Hypothesis
F: MM theory for Irrelevance of dividends
F: Payout Ratio
F: Walter’s Model of Dividend
F: Gordon Growth Model
F: Dividend Theories
F: Timeline for Dividend Payment
F: Graham and Dodd Model of Dividend policy

Mergers and Acquisitions and Alliance
Mergers and Acquisitions: Corporate Restructuring, Value Creation, Merger Negotiations, Leveraged Buyouts, Takeover

Corporate Restructuring
Steps Involved in the Valuation of Merger
Merger Negotiations
Advantages of Merger
F: Corporate Restructuring
F: Gains to Corporate Restructuring
F: Mergers
F: Internation Negotiation Process
F: Negotiations Results
F: Hostile Takeover Defense
F: Merger and Acquisition Example
F: Case Study: Jenson’s view on Takeovers
F: Strategic Alliance

Portfolio Management
Portfolio Management: CAPM, APT

Capital Asset Pricing Model (CAPM)
F: Steps in Fixed Income Portfolio Management
F: Portfolio Expected Return
F: CAPM
F: Sharpe Single Index Model of Portfolio Management
F: CAL, CML, SCL & SML
F: Standard Deviation of Portfolio
F: Assumption of Modern Portfolio Theory
F: Efficient Market Hypothesis (EMH)

Derivatives
Derivatives: Options, Option Payoffs, Option Pricing, Forward Contracts and Future Contracts

Working Capital Management
Working Capital Management: Determinants, Cash, Inventory, Receivables and Payables Management, Factoring

International Financial Management, Foreign exchange market.
International Financial Management, Foreign exchange market.

Terminologies of Foreign Exchange Market
Significance of Foreign Exchange
Foreign Exchange Quotation
Expatriates
F: International Finacial Management
F: Foreign Exchange Market
F: Parity Conditions in Foreign Exchange Market
F: Foreign Exchange Quotation
F: Pegged Exxchange Rate
F: Foreign Exchange Risks
F: fixed vs floating exchange rate regimes

Final Evaluation

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