INDIAN INSTITUTE OF MANAGEMENT, LUCKNOW FINANCIAL MANAGEMENT TERM – III, PGP – 1 2011-12 Faculty Number of sections Room No Telephone

Mail ID Faculty Number of sections Room No Telephone Email Prof. Madhusudan Karmakar 3 (Post-Midterm) 113 6624 madhu@iiml.ac.in Prof. Ajay K Garg 2 (Pre- Midterm) 128 6609 ajaygarg@iiml.ac.in Prof. A Vinay Kumar 3 (Pre- Midterm) 220 6645 vinay@iiml.ac.in Prof. Madhumita Chakraborty 2 (Post- Midterm) 140 6625 madhumita@iiml.ac.in

Prof. Manoj Anand 1 225 6639 manand@iiml.ac.in

Course Introduction: ‘Financial Management’ is an introductory course in Finance This course focuses on the value of the firm and also the factors that influence this value, like various risks the firm faces while selecting a new project, changes in level of debt of the firm to mention a few. It also gives an introductory view of working capital management. Derivatives and lease financings methods are also discussed to give a fair view of instruments used by investors and firms to maximize value. This course is taught using exercises and cases. It is important that the student reads the intended reading material before coming to the class thoroughly. We repeat, students have to read the relevant reading material before attending the class! The students are expected to participate in all of the class room discussions. Course Objectives: The course intends to develop in students an understanding of executive decisions framework pertaining to new investments, financing, dividends, working capital management and attempts to stress the need for adequacy, appropriateness and responsiveness of such decisions. Following are major topics the course focuses on. • • • • • • The tools and techniques for evaluating investment proposals, particularly those that have long term implications; The amount of funds required to finance these investment proposals, the form and the proportion in which these funds are required; Working capital management; Whether the company should distribute all the earnings or retain a part or all of it; Evaluation of lease/hire purchase alternatives; Financial Derivatives.

Basic Text ( BT) • • Richard A. Brealey and Stewart C. Meyers, Franklin Allen and Pitabas Mohanty, Principles of Corporate Finance, New Delhi, Tata McGraw Hill. Latest Edition (BM) Kester, Ruback and Tufana, Case Problems in Finance, , 12th Ed, TMH

Principles of Finance with Excel. Tata McGraw Hill. Evaluating a Drug Licensing Opportunity Lecture 15 Mid Term Exam 2 . A. Mid Term End Term Session wise Outline: Sessions Details 1 Financial Management: Functions and Objectives Read: Chapter 1(BM) 2-3 Long term Investment Decision analysis. 6 & 11 (BM) Case Lecture New Heritage Doll Company: Capital Budgeting (In Polycopy) 1. Pearson Education. John Wiley Ross. and Profitability Index : Concepts Read: Chapters 5. 2006 Damodaran. Projects & Assignment. 6 & 11 ( BM) 4-7 Long term Investment Decisions : Applications Read: Chapters 5. Financial Management. Vikas Publishing House Pvt. S. Benninga. R W Westerfield. Lecture & Exercise Marks 40 30 30 • • EVALUATION 8 Complex Investment Decisions ( Investment decisions under inflationary conditions and adjustment for inflation) Read: (To be provided) Cost of Capital : Approaches & WACC Read: Chapters 4. (In polycopy) 11-12 Mariott Corporation (Abridged) 13-14 Merck & Co. Simon. 8th edition Components Quizzes. Whirlpool Europe. Return and CAPM Read: Diversification. Super Project. Oxford. IRR. The Neogi Chemical Company. Oxford University Press. (In Polycopy) 2. Corporate Finance. Ninth Edition 2001 I M Pandey.7 &8 (BM) Risk.NPV. J. Aswath (2006) Corporate Finance: Theory & Practice. CAPM and Cost of Equity Capital ( Reading material) Chapters 7 & 8 (BM) Risk Analysis in Long term investment decisions Read: Risk Analysis in Capital Budgeting (Reading material) Chapter 9 & 10 ( BM) Market Efficiency and Financing Decisions Read: Chapter 13 (BM) 9-10 Nike Inc. Payback period. Ltd. Principles of Managerial Finance. 9th edition.. 4. Lockheed Tri Star 3.Reference books • • • Lawrence J Gitman. Jaffe & R K Kakani (2009).

Sessions 16-19 20-24 25-27 28 29-30 Details Short term financing and Working capital management Read: Chapters 30 &31 (BM) Financing decisions 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 Read: Chapters 17. Dell’s Working Capital 2. plc Dividend Policy at FPL Group. Continental Carriers. Lecture & Exercise 3 . 23 & 24 (BM) Dividend Theories and Policies Read: Chapters 16 ( BM) Lease Financing vis-à-vis Borrow & Buy Read: Chapter 26 (BM) Financial Derivatives Read: (To be provided) case 1. Inc. 3. 2. American Home Products Corporation. 18. Hampton Machine Tools 1. Diageo.