1 FM CourseOutline
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Transcript of 1 FM CourseOutline
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Indian Institute of Management Lucknow
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INDIANINSTITUTEOFMANAGEMENT,LUCKNOW
POSTGRADUATEPROGRAMFINANCIALMANAGEMENT
FN1303TERMIII,201415
InstructorandContactInformation
Faculty Prof.MadhusudanKarmakar Prof.AjayKGargNumberofsections 2 2
RoomNo 113 128Telephone 6624 6609MailID [email protected] [email protected]
Faculty Prof.VivekRajvanshi Prof.VikasSrivastava
Numberofsections 2 1RoomNo 213 231Telephone 6615 6665
Email [email protected] [email protected] isan introductorycourse inFinanceThiscoursefocusesonthevalueofthefirmandalsothefactorsthatinfluencethisvalue,likevariousrisksthefirmfaceswhileselectinganewproject,changesinlevelofdebtofthefirmtomentionafew.Italsogivesanintroductoryviewofworkingcapitalmanagement. Derivatives and lease financings methods are also discussed to give a fair view ofinstrumentsusedbyinvestorsandfirmstomaximizevalue.Thiscourseistaughtusingexercisesandcases.Itisimportantthatthestudentreadstheintendedreadingmaterialbeforecoming to theclass thoroughly.We repeat,studentshave to read the relevant readingmaterial before attending the class! The students are expected to participate in all of the class roomdiscussions.COURSEOBJECTIVE
Everydecisionthatafirmmakeshasafinancialmanagementcomponenttoitandthecourseattemptstostresstheneedforadequacy,appropriatenessandresponsivenessofsuchdecisions.ThePurposeofthecourseisto:
Providestudentswithcomprehensiveknowledgeofcorefinancetheoriesandmodels. Provideastrongtheoreticalandanalyticalbasethatisgroundedinrealworldapplicationusing
cases and exercises. Among the topics covered in the course are: Investment Decisions,Financing Decisions, Dividend Decisions, Risk and Return, Working Capital Management,Lease/HirePurchaseandFinancialDerivatives.
Developanalyticalandcriticalthinkingskillsofstudentsinfinancialdecisionmakingandmakeuseofspreadsheetsinfinancialmodeling.
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RecognizeandresolvesocialandethicalissuesandagencycostsinStrategicfinancialdecisionmaking.
Enhancecommunicationskillsthroughcaseanalysis,writtenreportsandpresentations.
COURSELEARNINGOUTCOMESBytheendofthecoursethestudentshouldbeableto:
1) Understand and analyse the relationship between strategic decision making and corporatefinancingdecisions.
2) Explainhowtovaluecapitalinvestmentsandusethekeycapitalbudgetingtechniques.3) Understand the mathematics of risk and return and how risk affects the value of the asset in
equilibriumandalsoexplainthecharacteristicsofderivativeassets.4) Learn to compute the cost of capital and discuss the theoretical framework of informational
efficiency in financial markets and understand the tradeoff firms face while choosing capitalstructure.
5) Understandandexplaintherelevance,factsandroleofthedividendpolicy.6) ShouldbeabletocalculateWorkingCapitalrequirementsandUnderstandhowfinancialdecisions
cancontributetofirmvalue7) Understandfinancialmodellingandrealworldapplicationofcoreconceptsoffinance.8)Understandstrategicfinancialdecisionmakinginaglobalcontext.
ALIGNMENTSOFINTENDEDPROGRAM&COURSELEARNINGOUTCOMESSn. ProgramObjectives CourseLearning(CL)outcomes
(seesectionabove)1 Toacquireknowledgeandskillsinkeyfunctionalareas CL262 Tointernalizetheknowledgeandskillsinkeyfunctionalareas CL6,7,8;Assignments3 Tointegrateandapplybusinessknowledge CL1,6,7,8;Cases1114 Todevelopaglobalperspective CL8;CaseStudies5 Toinculcatevaluesofprofessionalism,ethicalleadershipand
socialresponsivenessCL1,6
6 Tomasterrelationalandinterpersonalcommunicationskills CasereportsandPresentationsREQUIREDCOURSEMATERIALSANDREADINGS
BasicText(BT) RichardA.BrealeyandStewartC.Meyers,FranklinAllenandPitabasMohanty,PrinciplesofCorporate
Finance,TataMcGrawHill.LatestEdition(BM)
Pandey,I.M,FinancialManagement,VikasPublishingHousePvtLtd,LatestEdition Kester,RubackandTufana,CaseProblemsinFinance,,12thEd,TataMcGrawHill
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Referencebooks LawrenceJGitman,PrinciplesofManagerialFinance,PearsonEducation.. Benninga,Simon,PrinciplesofFinancewithExcel,Oxford,OxfordUniversityPress. Damodaran,AswathCorporateFinance:Theory&Practice,JohnWiley Ross,S.A.,RWWesterfield,J.Jaffe&RKKakani.CorporateFinance,TataMcGrawHill.EVALUATION
Exams:Therewillbetwoexaminations. Quizzes:Tobeannouncedbythefaculty. Group Assignments/ Project Report: Each student will be assigned to a group. More
details of this group project report will be posted on and will also be discussed inclass.
Class Participation: Students are responsible for all materials covered and readingsassigned. Be prepared to answer certain questions that had been emphasized in priorclassesorfromthereadingassignments.
GRADINGSCHEME
MidTermExam 30EndTermExam 30Quizzes/Assignments/GroupProject/CP
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Total 100ACADEMICDISHONESTY
Academicdishonestyormisconductischeatingthatrelatestoanacademicactivity.ItisaviolationoftrustbetweentheInstituteanditsstakeholders.Plagiarism,fabrication,deception,cheatingandsabotageareexamplesofunacceptableacademicconduct.PleaseconsultthePGPManualforthesectiononacademicdishonesty
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COURSESCHEDULESessions Details Case TentativeDates(SecC
&FOnly)1 FinancialManagement:Functionsand
ObjectivesRead:Chapter1(BM)
Lecture 3rdJan
23 LongtermInvestmentDecisionanalysisNPV,IRR,Paybackperiod,andProfitabilityIndex:ConceptsRead:Chapters5,6&11(BM)
Case1:NewHeritageDollCompany:CapitalBudgeting(InPolycopy)
5th,6thJan
47 LongtermInvestmentDecisions:ApplicationsRead:Chapters5,6&11(BM)
Case2:LockheedTriStarCase3:SuperProject.
7,11,12,13Jan
8 ComplexInvestmentDecisions(Investmentdecisionsunderinflationaryconditionsandadjustmentforinflation)Read:(Tobeprovided)
Lecture&Exercise 18Jan
910 CostofCapital:Approaches&WACCRead:Chapters4,7&8(BM)
Case4:NikeInc.(Inpolycopy)
19,20Jan
1112
Risk,ReturnandCAPMRead:Diversification,CAPMandCostofEquityCapital(Readingmaterial)Chapters7&8(BM)
Case5:MariottCorporation(Abridged)
21,27
1314 RiskAnalysisinLongterminvestmentdecisionsRead:RiskAnalysisinCapitalBudgeting(Readingmaterial)Chapter9&10(BM)
Case6:AirbusA3XX:DevelopingtheWorldsLargestCommercialJet(A)(Inpolycopy)
28Jan,10feb
15 MarketEfficiencyandFinancingDecisionsRead:Chapter13(BM)
Lecture 11feb
MIDTERMEXAM
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1620 Financingdecisionsa) FinancialandoperatingLeverageb) Capitalstructuretheoriesc) CapitalStructureplanningandpoliciesd) Raisinglongtermfundsfromcapital
marketsandfinancialinstitutionsRead:Chapters17,18,23&24(BM)
Case7:ContinentalCarriers.Case8:AmericanHomeProductsCorporation.
18,23,24,25feb,2ndMar
2123 DividendTheoriesandPoliciesRead:Chapters16(BM)
Case9:DividendPolicyatFPLGroup,Inc.
3,4,9Mar
24 LeaseFinancingvisvisBorrow&BuyRead:Chapter26(BM)
10mar
2528 ShorttermfinancingandWorkingcapitalmanagementRead:Chapters30&31(BM)
Case10:DellsWorkingCapitalCase11:HamptonMachineTools
11,16,17,18mar
2930 FinancialDerivativesRead:(Tobeprovided)
Lecture&Exercise 23,24mar
ENDTERMEXAM