Financial Management (22MBA22) VTU 2022 Scheme Notes
| VTU NOTES | |
|---|---|
|
Subject code |
22MBA22 |
|
Semester |
2nd |
Module - 1
Introduction: Financial Management: Definition and scope- objectives of Financial Managementrole and functions of finance managers. Interface of Financial Management with other functional areas. Indian Financial System: Structure-types-Financial markets- Financial Instruments -Financial institutions and financial services- Non-Banking Financial Companies(NBFCs). Emerging areas in Financial Management: Risk Management- Behavioural Finance- Financial Engineering- Derivatives (Theory).
Module - 2
Time value of money: Time value of money –Future value of single cash flow & annuity – Present
value and discounting-present value of single cash flow, annuity & perpetuity. Simple interest &
Compound interest – Capital recovery factor & equated annual instalments. (Theory & Problem).
Module - 3
Long term sources of Finance & Cost of Capital: Shares- Debentures- Term loans and deferred
credit-Lease financing- Hybrid financing- Venture Capital-Angel investing- private equity- Crowd
funding (Theory Only). Cost of Capital: Basic concepts-Components and computation of cost of
capital- Cost of debentures- cost of term loans- cost of preferential capital-cost of equity (Dividend
discounting and CAPM model) – Cost of retained earnings – Determination of Weighted average cost
of capital (WACC) (Theory & Problem).
Module - 4
Capital structure and Dividend Decisions: Capital structure– Planning the capital structureoptimum capital structure- determination of capital structure- Governance of Equity and DebtLeverages- EBIT and EPS analysis-Return of Investment (ROI) &Return on Earnings ( ROE)
analysis.(Theory & Problem).
Dividend decisions & policies – Factors affecting the dividend policy – types of Dividend Policyforms of dividend-bonus issue-stock split (Theory only)
Module - 5
Long term Investment Decisions (Capital Budgeting): Need and importance of capital budgeting
and its process-Techniques of capital budgeting – [Payback period, time adjusted payback period,
accounting rate of return , Net present value, Internal rate of return, Modified internal rate of return,
Profitability index method,). Capital Rationing. Estimation of cash flows for new projects and
replacement projects. (Theory & Problem).
Module - 6
Long term Investment Decisions (Capital Budgeting): Need and importance of capital budgeting
and its process-Techniques of capital budgeting – [Payback period, time adjusted payback period,
accounting rate of return , Net present value, Internal rate of return, Modified internal rate of return,
Profitability index method,). Capital Rationing. Estimation of cash flows for new projects and
replacement projects. (Theory & Problem).