University of Management and Technology
Course Outline
Course code: FN-550 / FN-545
Course title: MANAGERIAL FINANCE/FM
Program
MBA
Credit Hours
3
Duration
30 sessions (1H 15M each)
Prerequisites
All accounting courses
Resource Person
Counseling Timing
(Room#
)
Contact
Chairman/Director Program signature………………………………….
Date………………………………………….
Course Outline
Page 1
Learning Objective:
By the end of this course you should be able to realize:
 That a working knowledge of finance is important even if you are not
planning a career in finance.
 Besides wanting to pass this course, why do you need to understand finance.
 How should a business organization manage its everyday financial activities?
 Understand the difference between accounting profits and cash flows.
 The value of money versus time (the concept of time value of money).
 The role of interest rate on the economy.
 The role of interest on Value (example: your savings and loans).
 An overview of the Capital Budgeting process and techniques.
 Apply and evaluate financial information in a simulated case setting.
 Increase your confidence to participate in financial decision making.
Learning Methodology:
The resource person shall explain and discuss a topic in accordance with course
outline & students shall be asked to solve & discuss various exercises, problems &
cases based on those discussions. Guidance in this respect will be provided by the
instructor in and outside the class during counseling hours.
Grade Evaluation Criteria
Following is the criteria for the distribution of marks to evaluate final grade in
a semester.
Quizzes / Assignments
20%
Group Project/Case Study
20%
Mid-Term
25%
Final exam
35%
Total
Course Outline
100%
Page 2
Recommended Text Books:
Course pack
Reference Books:
1. Fundamentals of Financial Management, Brigham & Houston (Concise 4e)
2. Fundamentals of Corporate Finance by Brealey, Myers, Marcus (5e)
3. Corporate Finance by Ross, Westerfield, and Jordan (8e)
Calendar of Course contents to be covered during semester
Course code FN-550 / FN-545
Session
Course title: MANAGERIAL FINANCE
TOPIC
Discussion Topics


AN OVERVIEW OF
FINANCIAL MANAGEMENT


An introduction to Financial Management
Major areas and functions in Financial
Management
Important Financial Decisions
Overview of analysis of Financial Statement
and cash flows.
1
TIME VALUE OF MONEY


2,3
BONDS AND THEIR
VALUATION
4,5
RISK AND RATES OF
RETURN
Course Outline









Time lines, Future Value, Present Value.
Present Value and Future Value of Ordinary
Annuities.
Perpetuities
Uneven cash flow streams, different
compounding periods, Fractional time periods,
Effective interest.
Loan Amortization.
Characteristics of Bonds with call provisions
and sinking funds and other features.
Bond valuation & bond markets.
Bond Yields: yields to maturity, yield to call
current yield, capital gains yield.
Investment returns, expected rate of return
Stand alone risk: standard deviation & CV
Risk aversion and required returns
Page 3


6,7
8
MID TERM
STOCKS AND THEIR
VALUATION


9,10
11,12
Portfolio risk: Diversifiable vs Market.
Security Market Line and CAPM.
WEIGHTED AVERAGE COST
OF CAPITAL (WACC)




THE BASICS OF CAPITAL
BUDGETING






Type of common Stock, common stock markets
and transaction.
Stock Valuation Models: constant growth
Gordon model, supernormal growth stock
valuation, corporate value model.
Stock market equilibrium.
Efficient market hypothesis.
Cost of Debt.
Retained Earning: CAPM approach, discounted
approach.
Cost of New Common Stock.
Adjusting WACC for risk.
Optimal Capital structure and Marginal Cost
Importance of Capital budgeting.
Capital budgeting decision rules.
Payable period, NPV, IRR, MIRR,NPV vs IRR
13,14,15
Course Outline
Page 4