Financial management – Introduction to financial management, objectives of financialmanagement – profit maximization and wealth maximization. Changing role of financemanagers. Interface of Financial Management with other functional areas.Indian financial system – Primary market, Secondary market – stocks & commodities market,Money market, Forex markets. (Theory Only)Sources of Financing: Shares, Debentures, Term loans, Lease financing, Hybrid financing,Venture Capital, Angel investing and private equity, Warrants and convertibles (Theory Only)
Time value of money –Future value of single cash flow & annuity, present value of single cashflow, annuity & perpetuity. Simple interest & Compound interest, Capital recovery & loanamortization.
Cost of Capital: Cost of capital – basic concepts. Cost of debenture capital, cost of preferentialcapital, cost of term loans, cost of equity capital (Dividend discounting and CAPM model). Costof retained earnings. Determination of Weighted average cost of capital (WACC) and Marginalcost of capital.
Investment decisions -– Investment evaluation techniques – Net present value, Internal rate ofreturn, Modified internal rate of return, Profitability index, Payback period, discounted paybackperiod, accounting rate of return. Estimation of cash flow for new project, replacement projects.
Working capital management – factors influencing working capital requirements. Currentasset 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)
Capital structure and dividend decisions – Planning the capital structure. (No capital structuretheories to be covered) Leverages – Determination of operating leverage, financial leverage andtotal leverage. Dividend policy – Factors affecting the dividend policy - dividend policies- stabledividend, stable payout. (No dividend theories to be covered).
Emerging Issues in Financial management: Derivatives, Mergers and Acquisitions,Behavioural Finance, Financial Modelling, Financial engineering, risk management. (TheoryOnly).