SYLLABUS

¨          Meaning and Definition of Finance

¨          Importance of Finance

¨          Types of Finance: Public and Private

¨          Sources of Finance:

(1)       Long Term Sources: Term Loans, Debentures, Bonds, Zero Coupon Bonds, Convertible Bonds, Equity Shares, Preference Shares, CD, CP, Public Deposits.

(2)       Short Term Sources: Bank Finance, Trade Credit, Other Short Term Sources.

(3)       Venture Capital and Hybrid Financing.

(B)       Financial Management:

¨          Meaning and Importance of Financial Management.

¨          Scope of Financial Management.

¨          Functions and Objectives of Financial Management.

¨          Primary Objective of Corporate Management.

¨          Agency Problem.

¨          Organization of Finance Function.

¨          Emerging Role of Finance Managers in India.

(C)       Objectives of the Firm:

¨          Profit Maximization and Shareholders Wealth Maximization.

¨          Profit v/s Value Maximization.

¨          Introduction.

¨          Financial Forecasting – Meaning, Techniques, Benefits.

¨          Approaches to Financial Planning.

¨          Economic Value Added (EVA) – Measurement and Components.

¨          Free Cash Flow (FCF).

¨          Concept.

¨          Present Value.

¨          Annuity.

¨          Techniques of Discounting.

¨          Techniques of Compounding.

¨          Nature of Capital Budgeting.

¨          Purpose of Capital Budgeting.

¨          Capital Budgeting Process.

¨          Types of Capital Investment.

¨          Basic Principle of Measuring Project Cash Flows.

¨          Increment Principle, Long Term Funds Principle, Exclusion of Financial Cost Principle, Post Tax Principle.

¨          Probability Technique for Measurement of Cash Flow.

¨          Capital Budgeting Techniques: Net Present Value; Profitability Index and Discounted Payback Method.

¨          A Comparison: Project Selection Under Capital Rationing.

(Note: Problems on computation of cash flow, ranking of projects on various techniques, selection and analysis with / without capital rationing.)

¨          Introduction and Definition of Cost of Capital.

¨          Measurement of Cost of Capital.

¨          Measurement of WACC using book value and market value method.

¨          Measuring Marginal Cost of Capital.

(B)       Capital Structure Decisions:

¨          Meaning and Choice of Capital Structure.

¨          Importance of Optimal Capital Structure.

¨          EBIT-EPS Analysis.

¨          Capital Structure Theories.

¨          Dividend  Policies (Walter and Gordon).