Unit 1
Financial management: Meaning and definition – Importance –Scope– Objectives- Functions of financial management – Finance manager – Functions and role of finance manager – Time Value of Money- concept of risk and return.
Unit 2
Investment Decision: Capital budgeting process – Estimation of relevant cash flows -Payback Period method – Accounting Rate of Return – Net Present Value – Net Terminal Value – Internal Reate off Return – Profitability Index – Capital budgeting under risk -Certainty Equivalent Approach and Risk Adjusted Discount Rate.
Unit 3
Financing Decision –Sources of Finance – Cost of capital – cost of debt – cost of preference capital – cost of equity – cost of retained earnings – composite cost of capital – Capital structure – meaning – Optimal Capital Structure- factors determining capital structure – Capital Structure Theories – Net Income Approach, NOI, MM theory – types of Leverage – operating leverage, financial leverage, combined Leverage.
Unit 4
Dividend- Types of Dividend Policies – Factors determining dividend – Theories of Dividend Policies –Walter’s Model, Gordon and MM -. Stock Splits – Stock repurchases
Unit 5
Management of Working Capital – Meaning, Concept, types, and determinants – Estimation of working capital requirements – Working Capital Cycle – Management of Cash – Receivables management- Inventory management.