Book Details

Financial Management (O.U)

Financial Management (O.U)

Published by SIA Publishers and Distributors (P) Ltd.

Course Code : MBA II-Sem (O.U)
University : Osmania University
Regulation : 2020
Categories : Management
Format : ico_bookPDF (DRM Protected)
Type :


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Description :


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.


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.


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


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.


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.

Note : MBA II-Sem OU, Financial Management it is according to 2016-17 (CBCS) syllabus.

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