Financial Management I

Se. Topic No. 1 Course Overview and Briefing Introduction to Financial Management Objectives Functions and Scope Unilever Limited: Evolution Interface of Financial Transforming the RWJ Ch. 1 Management with Other Functional Areas Finance Function Environment of Corporate Finance. Infosys and Satyam Computers: Whose Wealth is Maximized? Introduction Types of Cash flows Future Value of a Single Cash Flow, Multiple Flows and Annuity Present ABC Wealth RWJ Ch. 4 Value of a Single Cash flow, Multiple Flows Advisors and Annuity, Growing Annuity, Perpetuity and Growing Perpetuity. Concepts Covered Case-Study Readings

Time Value of Money

5 6 7 Risk and Return Concepts Risk in a Introduction to Portfolio Context Relationship Between Risk and Return Risk and Return CAPM and Dividend Capitalization Model. An Analysis of Small Savings Scheme in India MRPL and RPL: RWJ Ch.9 & Analysing Risk and Ch. 10 Return

8 9 10 11

Smart Investors Ltd. First test component Valuation of Securities Concept of Valuation Bond Valuation Equity Valuation: Dividend Capitalization RIL Bonds Approach and Ratio Approach Valuation of Warrants and Convertibles. Pricing Using DDM: Indian Banking Sector Max Software Services: Relative Valuation Cost of Equity Using CAPM Financial Markets Functions and Classifications of Financial Markets Evolution of ISMR Overview of Money Market Forex Market Financial Markets in and NSE Financial Markets Government Securities Market India Factbook** International Capital Market Participants. RWJ Ch. 5

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Cost of Capital

Concept and Importance Cost of debenture Term loans Equity capital and retained earnings Calculation of Weighted Average Cost of Capital Weighted Marginal Cost of Capital Schedule.

Ambuja Cement Cost of Capital

RWJ Ch.12

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Allied Products* The Process of Capital Budgeting Basic Principles in Estimating Cost and Benefits Basics of Capital of Investments Appraisal Criteria: Expenditure Discounted and Non-Discounted Methods Tata Nano RWJ Ch.6 Decisions (Pay-Back Period Average rate of return Net Present Value Benefit Cost Ratio Internal Rate of Return) Evaluation of Capital Investment Projects Second test component Analysis of Project Cash Flows Cash Flow Estimation Identifying the Relevant Cash Flows Cash Flow Goodweek Tires Analysis Replacement Cash flow Cash Inc.* Flow Estimation Bias I. Q. Inc.* Jimmys Hot Dog Stand* Risk Adjusted Discount Rate, Certainty Risk Analysis in Appraisal of Bharat equivalent, Scenario & Sensitivity Analysis, RWJ Ch. 8 Capital Budgeting Insulation Ltd. (BIL) Decision Tree RWJ Ch.7

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25 26 27 28 29 30 31 32 33

Introduction to Derivatives

Introduction to Futures, Options and Swaps. Types of Futures, Options and Swaps

Rohan Agro Products Ltd.

RWJ Ch. 22 & Ch. 25

Contemporary Issues and Financial Management

RWJ: Ross, Stephen A., Randolph W. Westerfield and Jeffrey Jaffe, (2008), Corporate Finance, 7th edition, Tata McGraw-Hill Publications. * The cases are from the prescribed textbook Corporate Finance, 7th edition, by Ross, Westerfield and Jaffe, Tata McGraw-Hill Publications. ** ISMR: Indian Securities Market: A Review available at http://www.nseindia.com/us/factsandfigures ** NSE Factbook available at http://www.nseindia.com/us/factsandfigures

EVALUATION
The course evaluation consists of five components: # 1 2 3 4 5 Component Class Participation Multiple Choice Questions Quiz Class Test Project End Term Exam Total Weightage 40% 10% 10% 10% 30% 100%

Class Participation It is for 40% weightage and will be conducted in three components.

Multiple Choice Questions Quiz The first test in the eleventh session will be an MCQ pattern Quiz for 10% weightage. Any student who is absent or does not sit in his/her own seat would straight away be awarded a zero for evaluation for this component There will be no Make-up or retests. Quiz will be based on the concepts covered in the previous classes plus the case facts of the cases discussed till then. The Quiz will be typically for a period of 20-25minutes.

Class Test The class test for 10% weightage in internal evaluation will be conducted in 24th session based on curriculum discussed till the 23 session. Any student who is absent or does not sit in his/her own seat would straight away be awarded a zero for evaluation for this component There will be no Make-up or retests.

Project Internal evaluation Project component is a group component. Students have to make groups of five and are free to form/select their own groups. Any other group size has to be decided after discussion with the faculty. All students have to submit their project groups by June 30. In case groups are not formed by June 30, the faculty will finalize the groups. Students are advised to stick to the schedule for project presentations. Instructions regarding project topic will be given once the groups are finalized.

End Term An end term exam covering the entire syllabus would be for 3hrs and would be comprehensive in nature.