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Objective: To acquaint the students with the basic concepts of management of business finance.
Detailed Curriculum:
Unit I: Introduction: Nature and scope of financial management - finance functions-treasury vs.
controller functions - changing role of financial management
Unit II: Cost of Capital: Cost of debt, preference, equity capital and retained Earnings - Weighted
average, marginal cost of capital.
Unit III: Investment decisions: Capital budgeting process- basic principles of capital expenditure
proposals-various appraisal methods-Average rate of return, payback period, NPV, IRR and profitability
index, merits and demerits of appraisal methods-conflicts in decision making - capital rationing.
Unit - IV: Financing Decision: Sources of finance – debt, preference and equity Capitals - Operating and
financial leverage, total leverage- Capital structure - net income and net operating income approaches-
optimal capital Structure- Factors affecting capital structure - EBIT/EPS and ROI & ROE analysis. Capital
structure policies in practice.
1. Khan M.Y. and Jain P.K.: Financial Management, Text and Problems, Tata McGraw Hill, New Delhi.
Recommended Reference Books:
1. Prasanna Chandra : Financial Management Theory and Practice, Tata Mc Graw Hill, New
Delhi.
2. Pandey I.M.: Financial Management, Vikas Publishing House, New Delhi.
3. Ravi M. Kishore: Financial Management, Taxman, Delhi.