The aim of this course is to familiarize students with an overview of the principles, methods and practices of financial decision making in firms. Major topics that will be covered include: Nature of financial management: finance in organizational structure of the firm, value maximization goal as a financial decision criterion, financial functions and agency problems. Financial management concepts: financial statements and cash flows, time value of money; Securities valuation: bond and stock valuation. Strategic investment decision making: estimation of cash flows, estimation of cost of capital, evaluation of cash flows. Strategic financing decision making: operating and financing leverage, EBIT-EPS analysis, breakeven and indifference charts. Dividend policy decision making: nature and types of dividend policy, determinants, stock dividends and stock splits.
The objective of this course is to familiarize students with concepts, theories and practices of financial management of the corporation. It also aims at imparting analytical and problem solving skills in students for making investment, financing and dividend decisions.
After completion of this course, students will be able to
- Define the meaning of financial management
- Apply the concepts of time value of money in financial planning
- Interpret the financial statements and their uses
- Carry out financial analysis using ratios and other tools
- Value the equity and debt securities
- Compute and use the cost of capital in managerial decision making
- Apply the techniques of capital budgeting in investment decision making
- Evaluate the impact of use of debt in valuation of the company
- Evaluate the dividend scheme and decisions