Estimate the cost of capital for the whole firm, individual divisions as well as the specific projects with advanced techniques such as the marginal cost of capital (MCC) schedule.
Solve capital budgeting problems by risk-adjusted discount rate approach and certainty equivalent approach.
Explain and evaluate the Modigliani and Miller (MM) capital structure model (with and without taxes) and the Miller model.
Describe the impact of financial distress, agency costs and asymmetric information on capital structure.
Explain dividend theories such as the residual theory of dividends and the Miller and Modigliani's irrelevance argument.
Identify other factors that influence dividend policy.
Learn the difference between Short-Term and Long-Term Financial Planning.
Capital Structure Decisions.
Lease Financing and Hybrid Financing.
Mergers, LBOs working capital management, Divestitures, and Holding Companies.
Mode of Delivery
Face to face
Prerequisites
No
Recommended Optional Programme Components
None
Course Description
Financial management emcompasses the planning, directing, monitoring, organizing, and controlling of the monetary resources of an organization.
Course Contents
WEEK
TOPICS
1st Week
Introduction; Overview of Financial Management, Financial Statements, Cash Flow, and Taxes
2nd Week
Analysis of Financial Statements, The Financial Environment
3rd Week
Risk and Return: The Basics, Time Value of Money
4th Week
Bonds and Their Valuation
5th Week
Stocks and Their Valuation
6th Week
The Cost of Capital, The Basics of Capital Budgeting
7th Week
Midterm
8th Week
Cash Flow Estimation and Other Topics in Capital Budgeting, Risk Analysis and Real Options
9th Week
Long-Term Financial Planning, Capital Structure Decisions:The Basics
10th Week
Distributions to Shareholders: Dividends and Repurchases, Issuing Securities, Refunding Operations, and Other Topics
11th Week
Lease Financing, Hybrid Financing
12th Week
Current Asset Management, Short-Term Financing
13th Week
Derivatives and Risk Management, Bankruptcy, Reorganization, and Liquidation
14th Week
Mergers, LBOs, Divestitures, and Holding Companies
15th Week
General Review
Recommended or Required Reading
Financial Management; Theory and Practice, Brigham, Gapenski and Ehrhardt, Dryden Press
Planned Learning Activities and Teaching Methods
Lecture
Discussion
Assessment Methods and Criteria
Quantity
Percentage (%)
Mid-term
1
50
Total(%)
50
Contribution of In-term Studies to Overall Grade(%)
50
Contribution of Final Examination to Overall Grade(%)
