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FINANCIAL MANAGEMENT

Sub Code:
10MBA23
IA Marks:
50No. of Lecture Hrs/week: 04 Exam Hours: 3 HoursTotal no. of
Lecture Hrs: 56 Exam Marks: 100
MODULE 1 (4 Hours) Financial management
Introduction to finance, objectives of financial management
Profit maximization and wealth maximization. Changing role of
finance managers. Organization of finance function.

MODULE 2 (10 Hours)
Time value of money
Time Lines & notation, Future value of single cashflow &
annuity, present value of single cash flow, annuity&
perpetuity.Risk and Return

Risk & return of single asset, portfolio, Measurement of market
risk.
MODULE 3 (8 Hours)Sources of long term funds
Cost of capital

basic concepts. Cost of debenture capital, cost of preferential
capital, cost of term loans, cost of equity capital
(Dividenddiscounting and CAPM model ). Cost of retained
earnings. Determination of Weighted average cost
of capital (WACC) and Marginal cost of capital.
MODULE 4 (10 Hours)Investment decisions
Investment evaluation techniques

Net presentvalue, Internal rate of return, Modified internal rate
of return, Profitability
index, Payback period, Discounted pay back period , Accounting
rate of return.Estimation of cash flow for new project,
replacement projects.

MODULE 5 (6 Hours)Working capital management
factors influencing working
capitalrequirements. Current asset policy and current asset fina
nce policy.Determination of operating cycle and cash
cycle. Estimation of workingcapital requirements of a
firm.(Does not include Cash, Inventory&Receivables
Management)

MODULE 6 (8 Hours)Capital structure decisions
Planning the capital structure. (No capitalstructure theories to
be covered) Leverages

Determination of operatingleverage, financial leverage and
total leverage..Dividend policy

Factors affecting the dividend policy - dividend policies-stable
dividend, stable payout. (No dividend theories to be covered).

MODULE 7 (4 Hours)Indian financial system
Primary market, Secondary market

stocks &commodities, Money market, Forex markets.

MODULE 8 (4 Hours)Corporate governance
Divergence of interest, Agency cost, Corporategovernance in
developed world & in India, Reforming Corporate
governance,Legal provisions & SEBI code. Executive
compensation & ESOP.