Introduction to finance, objectives of financial management – profit maximization and wealth maximization. Changing role of finance managers. Organisation of finance function .
Time Lines & notation, Future value of single cash flow & annuity, present value of single cash flow, annuity& perpetuity.Risk and Return – Risk & return of single asset, portfolio, Measurement of market risk.
Cost of capital – basic concepts. Cost of debenture capital, cost of preferential capital, cost of term loans, cost of equity capital (Dividend discounting and CAPM model ). Cost of retained earnings. Determination of Weighted average cost of capital (WACC) and Marginal cost of capital.
Investment evaluation techniques – Net present value, 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.
factors influencing working capital requirements. Current asset policy and current asset finance policy. Determination of operating cycle and cash cycle. Estimation of working capital requirements of a firm.(Does not include Cash, Inventory &Receivables Management)
Planning the capital structure. (No capital structure theories to be covered) Leverages – Determination of operating leverage, financial leverage and total leverage..Dividend policy – Factors affecting the dividend policy - dividend policies- stable dividend, stable payout. (No dividend theories to be covered).
Primary market, Secondary market – stocks & commodities, Money market, Forex markets.
Divergence of interest, Agency cost, Corporate governance in developed world & in India, Reforming Corporate governance, Legal provisions & SEBI code. Executive compensation & ESOP.