INDIAN INSTITUTE OF MANAGEMENT LUCKNOW

Course: Financial Management-I and Financial Management-II for DGMP

Faculty: Prof M. Karmakar and Prof Ajay Garg (FM-I ) / Prof Vikas Srivastava and Prof S.Sowmya (FM – II)
Course Objective:
 To provide an understanding of modern corporate finance theory and its applications to financial decision-making. Broadly corporate finance
covers decisions by firms on investment and financing, capital structure and dividend policy. These decisions use two major tools: valuation
and financial planning. The central unifying theme of the course is the valuation orientation. Valuation is the basis for all financial decisions.

Course Deliverables:
The course will improve upon participants’ ability to
 Decide on investments of an enduring nature.
 Decide on the form, size and timing of capital required to meet the investment outlays.
 Analyze and plan capital structure & payout policy of the firm
 Manage the Working Capital

Pedagogy
A mix of pedagogy will be adopted. Conceptual inputs will be given through the short lectures. The extent & quality of learning will depend on the
quality & depth of discussion in the class. This in turn depends on the preparation and thinking that has been put in by the students for each
session. The participant is expected to spend three to four hours for each classroom session. About 75% of the time will be required for
preparation and about 25% of time will be required for revising what has been done in the class at the end of the day. Readings, assignments and
problems, whenever given, are a means of focusing on central issues, concepts or knowledge. A participant’s ability to solve problems is also a
reflection of the extent to which concepts have been understood.

Core Text:
Text Book: Financial Management: Theory & Practice By Prasanna Chandra, 11th Edition, McGraw Hill

Evaluation Criteria (For both the Courses)

End Term Exam: 60 Marks
Quiz/CP/Assignment : 40 Marks
 FM-I Prof Ajay Garg (Sessions 1 to 5) Prof M. Karmakar (Sessions 6 to 10) and
1 Overview of Corporate Finance Chapter 1 of Text Book
2 Time Value of Money Chapters 6 & 7 of Text Book
Applications of TVM in Corporate Finance
Valuation of Bonds and Stocks
3 Risk and Return Chapters 8 and Section 9.3 of Chapter 9 of
Text Book
4-5 Estimation of Cost of capital and application Chapter 14 of Text Book
Exercise
6-8 Capital Budgeting Techniques Chapter 11 of Text Book
NPV, IRR, Book Rates of return and Paybacks
9 Estimating Cash Flows and Applications Chapter 12 of Text Book
10 Market Efficiency Chapter 16 of Text Book

FM – II Prof Vikas Srivatava (Sessions 1 to 5) and S. Sowmya (Sessions 6 to 10)

1-3 Financing decisions Chapters 17, 19 and 20 of Text Book
a) Financial and operating Leverage
b) Capital structure theories
c) Capital Structure planning and policies
d) Raising long term funds from capital markets and financial institutions
4-5 Dividend Theory and Policy Chapters 21 and 22 of Text Book
6-7 Financial Planning and Forecasting Chapter 5 of Text book
Exercise
8-10 Short Term Financing and Working Capital Management Chapters 23 to 27 of Text book
WCM Concept
Operating and Cash Cycle
Cash Management
Receivables Management
WCM Financing