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Unit-I
The Finance Function
Nature and Scope; Evolution of Finance Function – Its New Role in the Contemporary Scenario – Goals of Finance
Function – Maximizing vs. Satisfying; Profit vs. Wealth vs. Welfare; The Agency Relationship and Costs; Risk-Return
Trade off; Concept of Time Value of Money – Future Value and Present Value.
Unit-II
The Investment Decision
Investment Decision Process- Project Generation, Project Evaluation, Project Selection and Project
Implementation. Developing Cash Flow; Data for New Projects; Using Evaluation Techniques –Traditional and
DCF Methods. The NPV vs. IRR Debate; Approaches for Reconciliation. Capital Budgeting Decision under
Conditions of Risk and Uncertainty; Measurement of Risk – Risk Adjusted Discount Rate, Certainty Equivalents
and Beta Coefficient, Probability Tree Approach, Sensitivity Analysis.
Unit-III
The Financing Decision
Sources of Finance – A Brief Survey of Financial Instruments; Capital Structure Theories, Concept and Financial
Effects of Leverage; The Capital Structure Decision in Practice: EBIT – EPS Analysis. Cost of Capital: The
Concept – Average vs. Marginal Cost of Capital; Measurement of Cost of Capital – Component Costs and
Weighted Average Cost of Capital
Unit-IV
Current Assets Management and Dividend Decision
Concept of Current Assets, Characteristics of Working Capital. Factors Determining Working Capital. Estimating
Working Capital Requirements. Working Capital Policy. Management of Current Assets: Cash Management,
Receivables Management and Inventory Management. Bank Norms for Working Capital Financing. The Dividend
Decision: Major Forms of Dividends – Cash and Bonus Shares. The Theoretical Backdrop – Dividends and
Valuation; Major Theories Centered on the Works of Gordon, Walter and Linter. A brief Discussion on Dividend
Policies of Indian Companies.
Unit-V
Corporate Restructuring and Corporate Governance
Corporate Mergers, Acquisitions and Takeovers: Types of Mergers, Economic Rationale of Mergers, Motives
for Mergers; Financial Evaluation of Mergers; Approaches for Valuation: DCF Approach and Comparable
Company Approach (No Practical Exercises). Corporate Value Based Management Systems. Approaches:
Marakon Approach and McKinsey Approach; Principles of Good Corporate Governance.
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CategoriesManagement
Format PDF
TypeeBook