FIN 401 : Financial Management

School of Business Studies, IBA Karachi

Program: BBA
Department Offering: Finance
Class ERP Number: 665
Faculty: Mr. Amir Khan

Class details

Class Timing and 6:30 p.m. to 8:20 p.m., City Campus CC F 1

Room

Session Days Tuesday / Thursday / Saturday

Credit Hours: 3 Credit Hours

Email amirkhan@iba.edu.pk

Counselling hrs TDB

Course Description

The course is designed to provide the undergraduate students with a deeper understanding of how
firms finance, invest and manage themselves in the real world. It continues from basic topics covered
in introductory business finance course, this course moves on to explain how specific techniques and
decision rules can be used to maximize the value of the firm.

BSAF Program Learning Goals

1. Communication Skills
Students will become effective speakers, listeners, writers and team members

2. Knowledge of All Business Disciplines

Students will gain a broad based understanding of a range of business disciplines

3. Critical Thinking
Students will develop the ability to classify, analyze and evaluate the available data using
appropriate techniques for effective decision making.

4. Ethics
Students will have an awareness and understanding of ethical issues.

5. Glocal Mindset
Students will develop a focus on global connections with local contexts through awareness of
diversity across cultures and markets.
 Course Learning Outcomes (CLOs)

1. Calculate the expected return and risk for a portfolio of two assets and explain the minimum-
variance and efficient frontiers.
2. Calculate the value of the common stock using the dividend discount and free cash flow
models.
3. Compute the annual cash flows for an expansion and a replacement project and evaluate
and select the optimal capital project.
4. Discuss the MM propositions concerning the capital structure and explain the impact of
leverage, taxes, financial distress, and agency costs on a company’s cost of equity, cost of
capital and optimal capital structure.
5. Compare and contrast different theories of dividend policy and discuss the factors which
affect the dividend payout.
6. Students should be able to critically analyze data using appropriate techniques. (LG302)

AOL Assessment Mapping

PLG mapped: The course is mapped with BBA/BSAF program learning goal LG3 and Program learning
objective LG302
Assessment Tool: Quiz/Term Exam

Teaching and Learning Methodology

1. Students are encouraged to read the topic prior to the lecture.

2. The course assignment is a written report on Analysis of Capital Structure and Dividend
Policy for a publicly listed firm.
3. Lecture presentations will be uploaded on Learning Management System (LMS).
4. Unannounced quizzes will be taken to gauge student progress.

Course Learning Outcomes mapped to Program Learning Outcomes

Knowledge of
Communication Critical Glocal
All Business Ethics
Program Learning Skills Thinking Mindset
Disciplines
Goals

Course Learning
Outcomes

1 X X

2 X X

3 X X

4 X X

5 X X
 6 (LG302) X X

Mapping to Course
Reading Session Topic
Learning Outcomes

 Overview of Risk Return Trade-off

 Standalone Risk
Chapter 8
CL01  Risk in a Porfolio Context
Risk and Rates of
CL06  The CAPM and Beta
Return & Handout
 Introduction to Efficient Frontier

 Stock price versus Intrinsic value

Chapter 9  Enterprise-Based Approach to Valuation
CL02
Stocks and Their  Multiple & EVA based approaches to valuation
CLO6
Valuation  Equilibrium stock price

 Approaches computing to component costs (Debt,

Preferred Stock, Retained Earnings, New Common
Chapter 10 CL04
Equity)
The Cost of Capital CL06
 Introduction to WACC

 Capital Budgeting Projects

Chapter 11  Projecting the Cash flows
The Basics of CL03  Introduction to Capital Budgeting tools &
Capital Budgeting application: Payback, NPV, IRR & MIRR

 Issues in Cash Flow

Chapter 12  Risk Analysis in Capital Budgeting
CL03
Cash Flow  Evaluating projects with unequal lives: least
CL06
Estimation and common multiple of lives approach and Equivalent
Risk Analysis annual annuity approach

Chapter 13  Introduction to real options in context of capital

Real Options and budgeting
CL03
Other Topics in
Capital Budgeting

 Capital Structure Decisions

 Business and Financial Risk
Chapter 14  Estimating the Optimal Capital Structure under
Capital Structure CL04 the MM Theory
and Leverage  Cost of Equity and Firm’s value with and without
leverage: Trade-off Theory, Signaling Thoery

 Dividend Theories
Chapter 15
CL05  Dividend payout policies
Distributions to
CL06  Factors affecting the dividend policy
Shareholders
 Stock Dividends, Stock Splits and Repurchases
 Text Book and Pre-Course Reading Material, Important Dates.

Recommended Text:
Fundamentals of Financial Management. Eugene F. Brigham & J. F. Houston, 15th Edition (2019)

Secondary Texts:
Local and international financial news articles may be recommended to students. Lecture case
studies will be provided to students.

Dates
 Midterm Exams: July 1 and 2, 2022
 Final Exams: August 1 and 2, 2022

Prerequisite Skills and Knowledge to take this Course

FIN 201

Assessments and Grading Scheme

Assessment Due Date Remarks

Assignments Ongoing Assignments will be done individually

Quizzes
Class Participation
Midterm and Final Exam
This course follows absolute grading.
Ongoing The quizzes may be in advance or from the
previous topic. There will be a perfect zero
if you miss the quiz
Ongoing Class participation is an important
componenet and sudent are expected to
come prepared for class discussion which
will include problem sets and case studies.
Exam Weeks There are two exams of 30+40 weightage

Marks Distribution

Marks Total Marks

Marks Head Total Frequency Total Exempted
/Frequency /Head

Assignments 2 0 5 10

Quizzes 6 1 2 10

Class Participation 1 0 10 10

Midterm Exam 1 0 30 30

Final Exam 1 0 40 40

Total Marks 100

 Comments and/or Suggestions

• Since subsequent topics build on previously learned material, it is imperative that students
keep up with the material. In addition, you should ensure that lectures are understood
properly. No recourse for missed quiz(s), except n-1.
• A student who misses a class is responsible for obtaining any handouts and information on
course content, assignments, due dates, test dates, etc.
• In case of late submission, marks will be deducted.
• Unethical behavior (cheating, plagiarism, proxy attendance) will be strictly penalized.
• Students are expected to read all topics and solve all the end of chapter problems given in
the text book
• Students are encouraged to follow global financial news (Bloomberg, etc.)

Technology & Innovation

• All course materials will be posted on LMS and grades will be posted on ERP. Students are
responsible to stay updated on these platforms.
• Students should bring calculator & textbook to class.
• Familarity with MS Word and Excel.
• For discussions and course related queries, please join the course WhatsApp group.

Experiential Learning Exposure(s)

NIL

Social Contribution / Impact

NIL

Academic Conduct

IBA policy

Attendance Policy

IBA policy

Plagiarism Policy

IBA policy

Withdrawal Policy

IBA policy