Gujarat Technological University: Identify

GUJARAT TECHNOLOGICAL UNIVERSITY
With effective
Syllabus for Master of Business Administration, 2nd Semester from academic
Subject Name: Corporate Finance (CF) year 2018-19
Subject Code: 4529202
practiced dividend
policies.
LO5: Identify and
explain corporate
2 2 1 1 - 2 3 - -
agency conflicts and
resolutions
LO6: Explain the
relationship between the
risks of capital 2 1 1 3 1 -- 1 1 1
investment with the
return.
LO7: Determine the
main factors that
financial managers
should consider when 2 2 2 2 - 3 - 1 1
determining a
company’s financing
strategy.
2. Course Duration: The course duration is of 40 sessions of 60 minutes each.
3. Course Contents:
Module Module Content No. of 70 Marks
No: Sessions (External
Evaluation)
Overview of Financial Management:
 Meaning, Objectives, Scope, Role and Functions of
Financial Management (Financial Decisions).
 Financial Goal - Profit Maximization versus
Shareholders’ Wealth Maximization.
Time value of Money: (theory and numerical)

I  Concepts, Compounding, Discounting, Annuities. 10 17
Sources of Long-Term Finance:

 Introduction to Equity Shares, Preference Shares and
Debentures, Term loan.
Valuation of Bonds, Preference shares and Equity.

(numerical)
Page no. 2 of 5
With effective
Understanding Investment Decisions (Capital Budgeting

Decisions):
 Meaning, Features
 Types and Importance of Investment Decisions
o Discounted Cash Flow (DCF)
 NPV, IRR, MIRR, PI, Discounted
Payback
o Non-Discounted Cash Flow Techniques
 ARR, Payback period
Capital Rationing (theory and numerical)
II Understanding Dividend Decision: 10 18

 Dividend and dividend policy
 Factors affecting dividend payout
 Dividend payment models: (theory and numerical)
o Dividend relevance model
 Walter model
 Gordon model
o Dividend irrelevance model
 MM model
Basics of Decision Tree Analysis (1-level and 2-level)

(theory only)
Cost of Capital: (theory and numerical)
 Significance, Concept of the Opportunity Cost of Capital
 Component Costs of Capital - Cost of Debt, Preference
Capital and Equity Capital
 Weighted Average Cost of Capital (WACC)
Leverage: (theory and numerical)

 Types of Leverage - Operating, Financial and Combined
III 10 18
Leverage.
 Point of indifference
Understanding Financing Decisions (Capital Structure

Decisions): (theory and numerical)
 NI Approach
 NOI Approach
 MM Theory with and without Taxes
Working Capital Management:
 Concepts of Working Capital.
 Operating Cycle.
 Determinants of Working Capital.
IV 10 17
 Estimating Working Capital Needs. (theory and
numerical)
 Working Capital Finance Policies.
o Matching approach, conservative approach,
Page no. 3 of 5
With effective
aggressive approach.
Cash Management: (theory and numerical)

 Need for Cash Management.
 Cash Management Cycle.
 Cash Forecasting through budgeting.
 Determining the Optimum Cash Balance under Certainty
(Baumol’s Model) and Uncertainty (The Miller- Orr
Model).
Receivables Management:
 Nature and Goals of Credit Policy
 Credit Policy Variables(theory and numerical)
Application:
Select suitable organization and study:
 The role and functions of Finance department;
(30 marks
V  Select Scrip or bonds and do the valuation of its ---
CEC)
Securities;
 Study the investment decisions,
working capital policy and cash budgeting etc.
4. Pedagogy:
 ICT enabled Classroom teaching
 Case study
 Practical / live assignment
 Interactive class room discussions
5. Evaluation:
Students shall be evaluated on the following components:
Internal Evaluation (Internal Assessment- 50 Marks)
A  Continuous Evaluation Component 30 marks
 Class Presence & Participation 10 marks
 Quiz 10 marks
B Mid-Semester examination (Internal Assessment-30 Marks)
C End –Semester Examination (External Assessment-70 Marks)
6. Reference Books:
No. Author Name of the Book Publisher Year of
Publication /
Edition
Prasanna Chandra Financial Management, McGraw - Latest Edition
1
theory and Practice Hill
2 I M Pandey Financial Management Vikas Latest Edition
M. Y. Khan and P. Financial Management McGraw - Latest Edition
3
K. Jain Hill
Page no. 4 of 5

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GUJARAT TECHNOLOGICAL UNIVERSITY

2. Course Duration: The course duration is of 40 sessions of 60 minutes each.

Time value of Money: (theory and numerical)

Sources of Long-Term Finance:

Valuation of Bonds, Preference shares and Equity.

Understanding Investment Decisions (Capital Budgeting

II Understanding Dividend Decision: 10 18

Basics of Decision Tree Analysis (1-level and 2-level)

Leverage: (theory and numerical)

Understanding Financing Decisions (Capital Structure

Cash Management: (theory and numerical)

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