BITS PILANI, DUBAI CAMPUS

INSTRUCTION DIVISION
First Semester 2015 2016
Course Handout (Part II)
Date: 01.09.2015
In addition to Part I (General Handout for all courses appended to the Time Table) this portion further
specific details regarding the course.
Course No.
Course Title
Instructor-in-charge
Instructors

: FIN F315
(3 0 3)
: Financial Management
: Pushkala M
: Pushkala M

Scope and Objective of the Course:

This course aims at introducing students to the fundamental Corporate Finance concepts, theories, and the
process of financial decision-making. The structure of the course enables students to appreciate the
integration between financial markets, learn various theories of investment and risk, knowledge of business
environment and the role of finance manager in maximizing wealth of the firm. The primary objective of the
course is to discuss the key decisions made by financial managers. These include financing, investment,
shareholder rewarding policies, and managing daily operations; and to enable students to appreciate the
interdependencies between these decisions and their impact on the survivability of the firm.
Course Pre/Co- requisite (if any) & Catalogue / Bulletin Description: Given in the Bulletin 2014 2015
Study Material:
Text books:
Richard A. Brealey, Stewart C. Myers, Franklin Allen and Pitabas Mohanty, Principles of Corporate
Finance, 8/e, 2010, Tata McGraw-Hill Publishing Company Ltd.
Reference books:
1. Lawrence J. Gitman, Principles of Managerial Finance, 11/e, 2006, Pearson International Edition.
2. Eugene F. Brigham and Joel F. Houston, Fundamentals of Financial Management, 13/e, 2013,
(Southwestern) Cengage Learning.
Course Plan:
Lec.
No.
1-4

5-9

Learning
objectives
Introduction to
Financial
Management
Time Value of
Money, Bond
Valuation and
Discounted Cash
Flow Models of
Equity Valuation

10-12

Risks and Rates of

Return

13-16

17-19

Financial
Statements and
Cash Flows
Cost of Capital

20-26

Capital Budgeting

Contents
Discuss key decisions undertaken by financial manager
Value maximization principle
Introduction to different types of markets and securities
Explain the mechanics of compounding: how money grows
over time when invested
Concept of future and present value
Differentiate between an ordinary annuity and an annuity due,
and determine the future and present value of an annuity due
Discuss term structure of interest rates, concept of yield and
yield to maturity.
Calculate the annual percentage yield or effective annual
Define and measure the return of an individual investment
Define and measure the riskiness of an individual investment
Measuring portfolio risk, how individual securities affect
portfolio risk and diversification
Concept of Beta
Financial Statements and Ratio Analysis
Ratio Analysis
Understanding the application of cost of capital in business
decisions
Describe the concepts underlying cost of capital
Calculate the after-tax cost of debt, preferred stock, common
equity, and retained earnings and the firm's weighted average
cost of capital
Discuss different types and importance of capital expenditure
decisions
Highlight the difference between investment and expenditure

References
@ (Chapters)
TB/ 1 + Class
Notes
TB/ 2, 3, 4 & 23

TB/ 7, 8

TB/ 29

TB/ 19
R2 / 9

TB/ 5, 6, 9, 10
R2/ 10, 11

27-33

Leverage, Corporate
Financing, Capital
Structure and
Dividend Policy

34-40

Working Capital
Management (WCM)

and the way they are treated from accounting perspective

Introduction to project evaluation techniques -Payback
method, NPV, IRR and
Project selection criteria using NPV or IRR rule
Understand the difference between business risk and financial
risk
Discuss Operating Leverage, Financial Leverage and Total
(combined) Leverage
Modes of financing Debt vs. Equity financing
Shareholder rewarding policyCash vs. Non-cash rewards and
Dividend theory
Objective of Working Capital Management,
Factors Affecting Composition of Working Capital
Current Asset Management, Short-term financing and current
liability management

TB/ 13 18
R2/ 13 &14

RB/ 30 & 31
R2/ 15 & 16

*The lectures may be slightly diverge from aforesaid plan based on students' background & interest in the topic, which
may perhaps include special lectures and discussions that would be planned and schedule notified accordingly.

EC
Evaluation
Nature of
Duration
Weightage
N0
Components
Component
%
1
Test-1
Closed Book
50 minutes
25
2
Quiz-1
Closed book
20 minutes
08
3
Test - 2
Open book*
50 minutes
20
4
Quiz 2
Closed book
20 minutes
07
5
Compre Exam
Closed Book
3 hours
40
* Only prescribed text book(s) and hand written notes are permitted

Date & Time

Venue

06.10.2015 (Tue) 8th hour

28.10.2015 (Wed) 3rd hour
19.11.2015 (Thu) 8th hour
16.12.2015 (Wed) 3rd hour
10.01.2016 (Sun) (AN)

To be
announce
d

Evaluation scheme:

Mid-sem Grading:
Mid-sem grading will be displayed after two evaluation components or earlier whenever about 40% of
evaluation components are completed.
Note: A student will be likely to get NC, if he / she

Doesnt appear / appear for the sake of appearing for the evaluation components / scoring zero in
pre-compre total.
Makeup and Attendance policies:
Make-ups are not given as a routine. It is solely dependent upon the genuineness of the circumstances
under which a student fails to appear in a scheduled evaluation component. In such circumstances, prior
permission should be obtained from the Instructor-in-Charge (I/C).The decision of I/C in the above matter
will be final.
Attendance: Every student is expected to be responsible for regularity of his/her attendance in class
rooms and laboratories, to appear in scheduled tests and examinations and fulfill all other tasks assigned
to him/her in every course. A student should have a minimum of 60% of attendance in a course to be
eligible to appear for the Comprehensive Examination in that course. For the students under the purview of
Academic Counseling Board (ACB), the Board shall prescribe the minimum attendance requirement on a
case-to-case basis. Attendance in the course will be a deciding factor in judging the seriousness of a
student which may be directly / indirectly related to grading.
General timings for consultation:
Students should contact the Course Instructor in her chamber during the CCH for consultation.
CCH hour will be on Thursday, 2.50-3.40 p.m.
General instructions:
Students should come prepared for classes and carry the text book(s) or material(s) as prescribed by the
Course Faculty to the class.
Notices:
All notices concerning the course will be displayed on the respective Notice Boards.
Pushkala M.
Instructor-in-Charge
Contact Details:
Pushkala M, Chamber No: 217, Contact Tel. No: +9714 2753700 ext. 309, Mob: 050-6562687
Email: pushkala@dubai.bits-pilani.ac.in