Strategic Financial Management

Paper Code: 
BCP-411
Credits: 
06
Contact Hours: 
90.00
Max. Marks: 
100.00
Objective: 

Course Objectives:

  • To acquire the ability to apply financial management theories and techniques in strategic decision making.

Course Outcomes (COs):

Course

Learning outcome (at course level)

Learning and teaching strategies

Assessment Strategies

Paper Code

Paper Title

BCP-411

Strategic Financial Management
  • CO 129 To enable students will the application of financial management theories and techniques in strategic decision making
  • CO 130 To understand international financial management including working capital management
  • CO 131 To understand the concept of risk management, security valuation, securitization , mutual fund, derivatives and corporate valuation
  • CO 132 To compute and understand the concept of mergers, acquisition and corporate restructuring.

Approach in teaching:

Interactive Lectures, Discussion, Tutorials, Reading assignments

 

Learning activities for the students:

Self learning assignments, Effective questions, Seminar presentation,

 

Class test, Semester end examinations, Quiz, Solving problems in tutorials, Assignments, Presentation, Individual and group projects

 

18.00
Unit I: 
-
  • Financial Policy and Corporate Strategy: Strategic decision making framework, Interface of Financial Policy and strategic management, Balancing financial goals vis-à-vis sustainable growth.
  • Risk Management: Identification of types of Risk faced by an organization, Evaluation of Financial Risks, Value at Risk (VAR), Evaluation of appropriate method for the identification and management of financial risk.
  • Security Analysis: Fundamental Analysis, Technical Analysis a) Meaning b) Assumptions c) Theories and Principles d) Charting Techniques e) Efficient Market Hypothesis (EMH) Analysis
  • Securitization: Introduction Concept and Definition, Benefits of Securitization, Participants in Securitization, Mechanism of Securitization, Problems in Securitization, Securitization Instruments, Pricing of Securitization Instruments,  Securitization in India

 

18.00
Unit II: 
-
  • Security Valuation: Theory of Valuation, Return Concepts, Equity Risk Premium, Required Return on Equity, Discount Rate Selection in Relation to Cash Flows, Approaches to Valuation of Equity Shares, Valuation of Preference Shares, Valuation of Debentures/ Bonds
  • Portfolio Management: Portfolio Analysis, Portfolio Selection, Capital Market Theory, Portfolio Revision, Portfolio Evaluation, Asset Allocation, Fixed Income Portfolio, Risk Analysis of Investment in Distressed Securities, Alternative Investment Strategies in context of Portfolio Management
  • Mutual Fund: Meaning, Evolution, Types, Advantages and Disadvantages of Mutual Funds

 

18.00
Unit III: 
-
  • Derivatives Analysis and Valuation: Forward/ Future Contract, Options, Swaps, Commodity Derivatives
  • Interest Rate Risk Management: Interest Rate Risk, Hedging Interest Rate Risk a) Traditional Methods b) Modern Methods including Interest Rate Derivatives

 

18.00
Unit IV: 
-
  • Foreign Exchange Exposure and Risk Management: Exchange rate determination, Foreign currency market, Management of transaction, translation and economic exposures, Hedging currency risk, Foreign exchange derivatives – Forward, futures, options and swaps
  • International Financial Management: International Capital Budgeting, International Working Capital Management a) Multinational Cash Management - Course Objectives: s of Effective Cash Management - Optimization of Cash Flows/ Needs - Investment of Surplus Cash b) Multinational Receivable Management c) Multinational Inventory Management

 

18.00
Unit V: 
-
  • Corporate Valuation: Conceptual Framework of Valuation, Approaches/ Methods of Valuation a) Assets Based Valuation Model b) Earning Based Models c) Cash Flow Based Models d) Measuring Cost of Equity - Capital Asset Pricing Model (CAPM) - Arbitrage Pricing Theory - Estimating Beta of an unlisted company e) Relative Valuation - Steps involved in Relative Valuation - Equity Valuation Multiples - Enterprise Valuation Multiple f) Other Approaches to Value Measurement - Economic Value Added (EVA) - Market Value Added (MVA) - Shareholder Value Analysis (SVA) g) Arriving at Fair Value
  • Mergers, Acquisitions and Corporate Restructuring, Conceptual Framework, Rationale, Forms, Mergers and Acquisitions, Financial Framework b) Takeover Defensive Tactics c) Reverse Merger, Divestitures a) Partial Sell off b) Demerger c) Equity Carve outs, Ownership Restructuring a) Going Private b) Management/ Leveraged Buyouts Cross Border Mergers
  • Start-up Finance Introduction including Pitch Presentation, Sources of Funding, Start up India Initiative

 

References: 
  • Study Material Published by ICAI
  • Scanner-Arun Kumar (Suchitra Prakashan (P) Ltd)
  • Financial Management- Theory & Practice: Prasanna Chandra (Tata Mc Graw Hill Publishing Co New Delhi)
  • Financial Management-Principles & Practice: Sultan Chand & Sons, Darya Ganj New Delhi)
  • Financial Management-S.C Kuchhal (Chaitanaya Publishing House Allahabad)
  • Financial Management-I.M Pandey (Vikas Publishing House Pvt Ltd)
  • Financial Management and Policy-V.K Bhalla (Anmol Publications Pvt Ltd)

 

Academic Year: 
2020-2021
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