SCHEME OF WORK

BWFF 2043: ADVANCED FINANCIAL MANAGEMENT

SEMESTER A191 (2019/2020)
LECTURER’S NAME: PROF DR. MOHD AMY AZHAR MOHD HARIF

WEEK/ TOPIC OBJECTIVES HOUR METHOD TA REMARKS NOTES

DATE SUB-TOPIC
Agong’s
(1) 1.0 TIME VALUE OF MONEY Students should be able to: 3 Lecture and 1. Slides Distribute Birthday
(9 Sept)
REVIEWS discussion 2. Notes syllabus to
08/9 1.1 An Overview on Financial 3. Textbook students
– Management i. explain the relationship
14/9/2019 1.2 The Relationship Between between BWFF2033
Financial Management and and BWFF2043 and the Chapter 5 & 6
Advanced Financial objectives of learning (Ross, et al.)
Management the course
1.3 The Objectives of Learning ii. define and understand
Advanced Financial the conceptual and
Management calculation of future
1.4 Present Value and Future and present value in
Value cash flows.
1.4.1 Single Amount iii. deal with complex cash
1.4.2 Annuities flows.
1.4.3 Perpetuities iv. work with annuities and
1.4.4 Uneven Cash perpetuities.
Flows

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 Malaysia
(2) 2.0 BASICS OF VALUATION AND i. distinguish 3 Lecture and 1. Exercises Chapter 7 Day
BONDS VALUATION (16 Sept)
between different kinds discussion 2. Slides (Ross, et al.)
15/9 2.1 Valuation Concepts of bonds. 3. Notes
– 2.2 Intrinsic Value ii. explain the more 4. Textbook
21/9/2019 2.3 Characteristics of Bonds popular features of
2.4 Types of Bonds bonds.
iii. overview the
Malaysian bond market.
iv. define the term
value as used for several
different purposes.
v. explain the factors
that determine value.
(3) 2.5 Bond Valuation vi. describe the basic 3 Lecture and 1. Exercises Chapter 7
2.6 Yield to Maturity process for valuing discussion 2. Slides (Ross, et al.)
22/9 2.7 Important Factors in Bond assets 3. Notes
– Relationships vii. estimate the value 4. Textbook
28/9/2019 of a bond.
viii. compute a
bondholder’s expected
rate of return.
ix. explain five
important relationships
that exist in bond
valuation

(4) 3.0 STOCK VALUATION i. identify the basic 3 Lecture and 1. Exercises
3.1 Fund Raising in the Capital characteristics and discussion 2. Slides Chapter 8
29/9 Market features of preferred 3. Notes (Ross, et al.)
– 3.2 Features of Preferred Stock stock. 4. Textbook
05/10/2019 3.3 Preferred Stock Valuation ii. calculate the value of

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 3.4 Preferred Stockholder’s preferred stock.
Expected Rate of Return

(5) 3.5 Characteristics of Common iii. identify the basic 3 Lecture and 1. Exercises Chapter 8
Stock characteristics and discussion 2. Slides (Ross, et al.)
06/10 3.6 Common Stock Valuation features of common 3. Notes Individual
- 3.6.1 Single Holding Period stock. 4. Textbook practice (1)
12/10/2019 3.6.2 Constant Growth iv. calculate the value of
Dividend Model common stock.
3.6.3 Supernormal Growth v. calculate a stock’s
3.7 Common Stockholder’s expected rate of return.
Expected Rate of Return vi. overview of Malaysian
stock market

(6) 4.0 COST OF CAPITAL i. describe the concepts 3 Lecture 1. Slides

4.1 Definition and of costs of underlying the firm’s 2. Notes Chapter 14
13/10 capitalconcepts cost of capital 3. Exercises (Ross, et al.)
– ii. calculate the after-tax
19/10/2019 4.2 Determining individual cost cost of debt, preferred
of capital stock and common
 Bond equity.
 Preferred Stocks
 Common Stocks

(7) 4.3 Weighted average cost of iii. calculate a firm’s 3 Lecture 1. Slides Chapter 14
capital (WACC) weighted average cost 2. Notes (Ross, et al.)
20/10 4.4 Weighted marginal cost of of capital (WACC) 3. Exercises
– capital (WMCC) iv. calculate a firm’s
26/10/2019 4.5 Making investment decision weighted marginal cost
of capital (WMCC)
v. use the cost of capital to

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 evaluate new
investment
opportunities.

(8)

27/10 MID-TERM EXAM

–
2/11/2019
Prophet
5.0 TECHNIQUES IN CAPITAL i. determine whether a Muhammad
(9) BUDGETING new project should be ’s Birthday
accepted using the (9 Nov)
03/11 3 Lecture 1. Slides Chapter 9
5.1 Introduction to capital payback period.
– 2. Notes (Ross, et al.)
budgeting
09/11/2019 ii. determine whether a 3. Exercises
5.2 Payback period
5.3 Discounted payback period new project should be
5.4 Net present value (NPV) accepted using the net
5.5 Profitability index (PI) present value.
iii. determine whether a
new project should be
accepted using the
profitability index

(10) 3 Lecture 1. Slides Chapter 9

5.6 Internal rate of return (IRR)
10/11 5.7 Complications in capital
– Budgeting: Capital
16/11/2019 rationing and mutually
exclusive projects
 Time disparity
 Size disparity
 Unequal lives
iv. determine whether a
2. Notes (Ross, et al.)
new project should be
3. Exercises
accepted using the
internal rate of return.
v. explain how the capital
budgeting decision
process changes when a Group
limit is placed on the Assignment

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 dollar size of the capital
budget, or there are
mutually exclusive
projects.

(11) 6.1 CASH FLOWS IN CAPITAL i. explain the definition of 3 Lecture 1. Slides
BUDGETING capital budgeting 2. Notes Chapter 12
17/11 ii. identify relevant cash 3. Exercises (Titman et al.)
– 6.1 Relevant cash flow flow in capital
23/11/2019 6.2 Initial outlay budgeting
6.3 Annual cash flow iii. calculate intial
investment cash flow
iv. calculate operational or
annual cash flow
(12) 6.4 Terminal cash flow v. calculate terminal cash 3 Lecture 1. Slides Chapter 12
6.5 Replacement and expansion flow 2. Notes (Titman et al.)
24/11 of project vi. identify relevant cash 3. Exercises
– 6.6 Decision making in capital flow in capital
30/11/2019 budgeting budgeting.
vii. calculate intial
investment cash flow
viii. calculate operational or
annual cash flow Individual
ix. calculate terminal cash Assignment
flow

(13) 7.1 LEVERAGE AND CAPITAL i. understand the 3 Lecture 1. Slides Chapter 11 & 16
STRUCTURE difference between 2. Notes (Ross, et al.)
01/12 business risk and 3. Exercises

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 – 7.2 Business and financial Risk financial risk.
07/12/2019 7.3 Break-even analysis ii. use the technique of
7.4 Operating leverage breakeven analysis in
7.5 Financial leverage variety of analytical
7.6 Combined leverage settings. Individual
iii. distinguish among the practice (2)
financial concepts of
operating leverage,
financial leverage, and
combined leverage.
iv. calculate the firm’s
degree of operating
leverage, and financial
leverage, and combined
leverage.

(14) 7.7 Optimal capital structure vi. understand the concept 3

7.8 EBIT- EPS analysis of an optimal capital
08/12 structure.
– vii. use the basic tools of
14/12/2019 capital structure
management

(15) 8.1 DIVIDEND POLICY i. describe the trade-off Lecture 1.Slides Chapter 17
between paying 3 2. Notes (Ross, et al.)
15/12 8.2 Dividend payment versus dividends and retaining 3. Exercises
– profit retention. the profits within the
20/12/2019 8.3 Does dividend policy affect company.
stock prices. ii. explain the relationship
8.4 The dividend decision in between a corporation’s
practice. dividend policy and the
8.5 Dividend payment market price of its

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 common stock.
procedures.
iii. describe practical
8.6 Stock dividend and stock considerations that may
splits. be important to the
8.7 Stock repurchases firm’s dividend policy.
iv. distinguish among the
types of dividend
policies corporations
frequently use.
v. specify the procedures a
company follows in
administering the
dividend payment.
vi. describe why and how a
firm might choose to pay
noncash dividends (stock
dividends, bonus issue,
and stock split) instead
of cash dividends.
vii. explain the purpose and
procedures related to
stock repurchases.

FINAL EXAMINATION: 21 DEC 2019 – 11 JAN 2020

SEMESTER BREAK: 12 JAN – 8 FEB 2020

PREPARED BY: VERIFIED BY:

________________________ ________________________
Lecturer’s Signature & Stamp Programme Coordinator/ HoD’s Signature & Stamp
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Date: