23013 FUNDAMENTALS OF FINANCIAL MANAGEMENT

MODULE 1 – FINANCIAL MANAGEMENT – AN OVERVIEW

Financial management – Meaning, definition and importance. Nature of financial management – Scope of financial management – Traditional approach and Modern approach, Functions of financial management, Objectives of financial management – Profit maximization and wealth maximization- Time value of money – Simple problems on time value of money- compounding and discounting.

MODULE 2 – MEASUREMENT OF COST OF CAPITAL AND CAPITAL BUDGETING

Definition, meaning, importance. Concepts of costs.

Definition and meaning – significance- process, Type of projects –Investment evaluation techniques – Traditional techniques – Payback period and ARR– Modern techniques – NPV, IRR, PI, discounted payback period – Capital rationing – Meaning, causes and selection process.

MODULE 3 – FINANCING DECISIONS AND DIVIDEND DECISIONS

Capital structure, financial structure and optimum capital structure. Significance of capital structure and factors determining capital structure.

Meaning of dividend and dividend policy. Theories on dividend policy – Walter‘s Model, Gordon‘s Model, MM Hypothesis. Stability of dividend – Forms of dividend, Factors determining dividend policy.