The aim of this course is to familiarize students with an overview of the principles, methods, and practices of financial decision-making in firms.
Major topics that will be covered include:
Nature of financial management: finance in organizational structure of the firm, value maximization goal as a financial decision criterion, financial functions and agency problems.
Financial management concepts: financial statements and cash flows, time value of money;
Financial planning and forecasting: the financial plan, financial statement forecasting, the AFN formula and simple regression technique. Securities valuation: bond and stock valuation.
Strategic investment decision making: estimation of cash flows, estimation of cost of capital, evaluation of cash flows.
Strategic financing decision making: operating and financing leverage, EBIT-EPS analysis, breakeven and indifference charts.
Dividend policy decision making: nature and types of dividend policy, determinants, stock dividends and stock splits.