HANOI UNIVERSITY

FACULTY OF MANAGEMENT AND TOURISM

61FIN2FIM
FINANCIAL MANAGEMENT
Spring 2022
Course details
Course code 61FIN2FIM Course name Financial Management
Credit 3 Prerequisite 61ACC2POA (Principles of Accounting)
Term Spring 2021 Level Undergraduate
Course Coordinator Nguyen Thi Thanh Loan – loanntt@hanu.edu.vn
Nguyen Anh Tuan – tuanna@hanu.edu.vn
Pham Thi My Phuong- phuongptm@hanu.edu.vn
Instructor(s)
Nguyen Thi Van Anh – anhntv@hanu.edu.vn
Tran Tung – tungts@hanu.edu.vn
The syllabus contains important information. Please ensure that you read it carefully.
It is also strongly recommended that you keep this copy of your syllabus for future reference.

Course description:
This is an introductory course in finance that introduces the student the basic principles of corporate
financial management including investment principle, financing principle, and dividend principle.
These principles are fundamental understanding required for both a corporate finance career and
further education in areas of advanced corporate finance, investments, and banking. It also an
excellent primer for non-finance major students to familiarize with the world of finance.

Course goal:
The primary goal of this course is to enable the student to apply major concepts and topics in
finance to solve finance problems at the individual level and firm level, in other words, to make
financial decisions. To achieve this goal, it is extremely important that the student acquire thorough
understanding of the theories and accumulate quantitative skills through the course.

Course objectives:
This course provides students a comprehensive survey of financial management in relation to money
and capital market and investment activities. In other words, students will examine the role of
financial management in a typical business environment. They will learn to apply methods and
techniques to make financial decisions such as investing, financing, and dividend policy for the purpose
to maximize shareholders’ wealth. In addition, the students will be able to make his/her personal
financial decisions. More specifically, upon successful completion of this course, the student will be
able to:

• LO1: Explain the goal of financial management and the conflict of interest between financial
managers and owners.
• LO2: Describe the money-generating process of a firm and differentiate financial decisions,
investment decisions, and financing decisions.
• LO3: Describe the financial environment and financial instruments.
• LO4: Interpret financial ratios and use them to assess firms’ performance.
• LO5: Describe determinants of interest rate and the term structure of interest rates.
• LO6: Discuss time value of money concept and apply such a concept in valuing securities,
projects, and personal investment alternatives.
• LO7: Evaluate capital budgeting methods such as NPV, IRR, and payback period.
• LO8: Analyze the risk-return trade off and to assess risk-adjusted returns in portfolio setting.
• LO9: Discuss different dividend policies in relation to investors’ need.
• LO10: Calculate each type of cost of capital and overall cost of capital.
In addition to the about knowledge-based objectives, students are expected to gain other skills as
follow: analyze search information, read financial statements, present report, work in group, work
independently, manage time efficiently, be responsible, be respectful, and be professional.

Course structure:
While the course aims at providing a survey of finance concepts such as risk and return and
examining financial management practices, it centers on understanding and applying the single most
important finance concept namely TIME VALUE OF MONEY. The course is divided into three
modules: overview of financial management and firm performance, fundamental concepts, and
finance applications.

Organization of subject content:

Introduction to Financial Management (Chs 1-4)

• Forms of business organization

• The goal of financial management
• Valuation concepts: cash flows, time, risks
• The agency problem
• Financial markets and the corporation
• Firm performance
(Topic 1 & 2)

Time Value of Money (Chs 5-6)

• Valuation principles
• Critical factors in finance
• Single cash flows
• Multiple cash flows

• Interest rates
(Topics 3, 4, &5)

Security Valuation Investment theory (Ch8) Corporate Financial

(Ch7, Ch9) Decisions
• Risk and return
• Bond valuation • Portfolio theory • Capital budgeting
• Stock valuation • CAPM • Cost of capital
• Capital structure
• Dividend policy

(Topic 6) (Topic 7) (Topic 8, 9, &10)

Part 1 of this course provides introductory materials of organization structure of firm, the business
environment and capital market in which firm operates. It also aims at presenting several techniques
to appraise performance of a firm and to value a firm. The enterprise system discussed in this course
is of the United States where financial market is highly developed; we expect students to do several
tasks of examining the enterprise system in Vietnam and also compare and contrast the two
systems. In the US, the primary goal of financial management is to help managers maximize their
firms’ value. This primary purpose will govern every financial transactions within a firm and of the
firms with outside environment.

In part 2, we focus on the single most fundamental concept in finance that is the TIME VALUE OF
MONEY -TVM. The TVM is broken down in to the three most critical factors: cash flows, timing of
cash flows, and the riskiness of cash flows (i.e. measured by interest rate). These factors are
presented in a timeline and tied together in basic valuation models such as future value and present
value model. Since this concept and its applications are used extensively throughout the remainder
of the course, it is extremely important that students allocate plenty of time to this part.

Part 3 of this course presents two main areas in finance application: investment and corporate
finance1. Under investment application, we devote one section to show student how a typical risk
averse investor models risk and the importance of trade-off between risk and return through the
introduction to Capital Assets Pricing Model (CAPM). Under corporate finance application, we
describe the three major decisions that a financial managers need to make in relation to the firm’s
value maximization goal. In order to provide background materials for such two applications, a study
of stocks and bonds – two major financial instruments are described.

Course materials:

Textbooks: Students must purchase or have access to the following texts.

Main text: Brigham, E.F. (2012). Fundamentals of Financial Management, concise (7th Edition).
South-Western.

Recommended text: Van Horne, James C., and John Martin Wachowicz (2009). Fundamentals
of financial management (13th Edition). Pearson Education.
Students are expected to read assigned chapter(s) before taking part in the corresponding lecture.
Lecture arrangement is presented below.

Additional exercises: Besides the required tutorial exercises, students are encouraged to do the
additional exercises. Tutorial activities, together with additional exercises play essential role in the
preparation for the three exams.

Sample Exam: Sample final exam is provided in the last week of study period (i.e. before the last
lecture).

Course learning modes

This course employs blended learning method. A portion of the course is delivered online and some
portions are delivered face-to-face. All materials are available on the Google Classroom.

1
Please note that this is an introductory course in finance. The audiences often have diverse
backgrounds and different career goals. Therefore, we decide to address finance concepts and
applications from two points of view: a view point of an investor who wants to make “good”
investment and a financial manager whose main purpose is to maximize the firm value. Students are
expected to be in the position of an investor seeking for good investment when they learn investment
application and in the position of a corporate financial manager seeking for value maximization
when they learn corporate financial decisions – capital budgeting, capital structure, and dividend
policies.
Grading and assignments
The course grade is comprised of the following 05 elements:

Seq. Elements Type Weight

1. Class Participation Individual Assessment 10%

2. Progress test 1 (Mcq- quiz) Individual Assessment 20%

3. Progress test 2 (Mcq- quiz) Individual Assessment 20%

4. Final Exam Individual Assessment 50%

Class Participation: Students are required to attend lectures and tutorials in accordance with

the participation policy of the FMT.

Progress Test: 2 tests will be held during normal lecture time, tentatively in week 7 & 12 (in 30-40
minutes)

Final Exam: This will be a two-hour closed-book exam and cover all topics in the course. Final exam
format will be discussed during the last revision (last week of course)

Proposed weekly schedule

Tutorial classes starts one week after the lecture week

Week Topic Content Readings &

1,2 Topic 1 - Overview of
Financial Management &
overview of financial
market
3 Topic 2 - Financial
statement analysis
Tutorial
Activities
What is finance and financial management? Chapter 1 & 2
Types of business Tutorial 1.
Agency problems
Critical factors in finance
Financial decisions
Value vs. price
Money market & capital market
Resource allocation
Securities market & market regulation
Financial statements: Balance sheet, income Chapter 3 & 4
statement, cash flow statement Tutorial 2
Ratios & DuPont equation
Factors affecting ratio analysis
Qualitative analysis

4 Topic 3 - Interest Cost of money Chapter 6

Determinants of interest Tutorial 3
Yield curve
Pure Expectation Theory

5 Topic 4 - Time value of Timeline Chapter 5

money concept Types of cash flows Tutorial 4
Present value: Discounting
Future value: Compounding
Frequency
 6 Topic 5 - Time value of Real rate and nominal rate Chapter 5
money application Effective annual rate Tutorial 5
Loan amortization schedule

7 Topic 6 - Securities Bonds & their characteristics Chapter 7 &

valuation Bond valuation 9
Bond relationship Tutorial 6
Shares and their characteristics
Shares and valuation

8 Topic 7 - Risk and return –
portfolio theory.
Risk and return of a single investment (asset) Chapter 8
Risk and return of a portfolio. Tutorial 7
Portfolio theory and risk aversion concept
CAPM – Capital Asset Pricing Model
Risk-averse investors

9 Topic 9 – Cost of capital WACC Chapter 13

Cost of debt; Cost of preferred stock; Cost of Tutorial 9
common equity
Factors affecting WACC
Mistakes to avoid

10 Topic 8 - Capital budgeting Capital budgeting process Chapter 9

Payback period Tutorial 8
Net present value analysis – NPV Term project
Internal rate of return – IRR submission.

11 Topic 10 - Dividend policy Dividend policy theories: irrelevant vs. relevant Chapter 14
and revision dividend policy. Tutorial 10
Signaling hypothesis.
Clientele effect
DRIP
Stock repurchase vs. stock split.
12 Revision

Course communication
A subject page on Google classroom – FIN2FMA FINANCIAL MANAGEMENT for this course has been
created and you will be invited to join prior to the start of the course. All the materials of the course
will be provided on this platform.

Students with disability

If you have a disability and are in need of academic accommodations, please notify me immediately
to arrange needed supports.

Academic honesty
Faculty of Management and Tourism strictly prohibits all forms of academic cheating, fraud, and
dishonesty. These acts include, but are not limited to, plagiarism, buying and selling of course
assignments and research papers, performing academic assignments (including tests and
examinations) for other persons, and other practices commonly understood to be academically
dishonest. Acts of academic dishonesty may result a failing grade on the exam or assignment for
which the dishonesty occurred or failing the course.