FINANCIAL MANAGEMENT

I YEAR – II SEMESTER

COURSE CODE: 7MBA2C4

CORE COURSE –VIII – FINANCIAL MANAGEMENT

Unit I               Foundations of Finance

Overview of Financial Management –Finance its interface with other disciplines­ Planning Environment‑ Key Decision of Finance management ‑ Emerging Role of Finance manager in India

Unit II             Long Term Sources of Finance     

Long term finance: Shares debentures and term loans, lease, hire purchase, project financing, venture capital financing.

Unit III           Financing and Dividend decision

Cost of capital – meaning and measurement of cost of capital. Specific costs and overall cost of capital-Designing capital structure –NI approach and NOI approach.  Financial and operating leverage, capital structure, Dividend – meaning and types – Factors influencing dividend decision – Walter Model, Gordon Model and MM Model.

Unit IV           Working Capital Management

Principles of working capital: Concepts need; Determinants, issues and estimation of working capital, Accounts Receivables Management and factoring, Working capital finance, Trade credit, Bank finance and Commercial paper.

Unit V             Investment Decisions

            Capital Budgeting: Principles and techniques, Nature of capital budgeting - Evaluation Techniques, Payback, Accounting rate of return, Net Present Value, Internal Rate of Return, Profitability Index, Project selection under capital rationing.