Financial Management

Categories: Accounting, BBA 3rd Year

Course Content

Chapter-1 Goals and Functions of Finance
Meaning of Financial Management, Financial Goal, Maximize Shareholders, Wealth, Maximization of EPS, Corporate decisions, Importance of Financial Management, Factors influencing financial decisions, Agency Problems, Dealing with Agency Problems, Principle of Financial Management, Social Responsibility, Corporate governance.

Chapter-2 Capital Budgeting & Risk Analysis
Risk Evaluation approaches-Certainty Equivalents (CE), Risk-adjusted Discounted Rates (RADR), CE vs RADR, Probability Distribution Approach, Decision Tree Approach, Behavioral Approach for Dealing with Risk-Sensitivity Analysis, Simulation.

Chapter-3 Theory of Capital Structure
Introduction to the Theory, Assumptions and Definitions, NI Approach, NOI approach and Traditional Approach, Modigliani-Miller (MM) Position, Arbitrage process, Taxes Capital Structure, Corporate plus Personal Taxes, Merton Miller’s Equilibrium, Effects of Bankruptcy Costs, Tradeoff model, Packing order theory.

Chapter-4 Dividend Policy
Procedural Aspects of Paying Dividends, Types of Dividend Policies, Factors Affecting Dividend Policy, Dividend Payout Irrelevance, Arguments for Dividend Payout Mattering, Impact of Other Imperfections, Financial Signaling, Share Repurchase, Method of Repurchase, Repurchasing as Part of Dividend Decision, Stock Dividends, Stock Splits.

Chapter-5 Capital Market Financing
Public Offering of Securities, Traditional Underwriting, Best Efforts Offering, Making a Market, Shelf Registrations, Flotation Costs, Government Regulations for Issuing Securities, SEC Review, SEC Regulations in the Secondary Market, Selling Common Stock Through a Rights Issue, Value of Rights, Success of the Offering, Standby Underwriting, Oversubscriptions, Rights Issue vs. Public Offering, Green Shoe Provision, Financing a Fledgling, Initial Public Offerings, Information Effects of Announcing a Security Issue, Types of Long-term Debt Instruments, Retirement of Bonds, Preferred Stock and its Features, Common Stock and its Features, Bond Refunding.

Chapter-6 Lease Financing
Definition of Lease, Types of Lease, Leasing Arrangements, Advantages and Disadvantages of Lease, Lease versus Purchase Decision, Leasing in Bangladesh-Problems and Prospects.

Chapter-7 Working Capital Management
Importance, Determinants of Working Capital, Polices for Financing Current Assets, Operating Cycle and Cash Conversion Cycle, Estimating Working Capital Requirement.