Course info

Course Outcomes: Students of this course will be able to:
1. To evaluate capital structure and dividend decision
2. To manage cash flows by using techniques of cash management.
3. To summarize objectives and provisions of receivables
management
4. To differentiate between Merger and Acquisition
5. To analyze the financial management of sick units.

Syllabus:

Unit 1: Capital Structure Decision and Dividend Decision Capital Structure Decision: Financial leverage, Operating leverages, Indifference points. Approaches to appropriate Capital structure- EBIT-EPS Analysis, Guidelines for capital structure planning, Capital structure policies in practice. Dividend Decision: Determinants of Dividend Policy, Dividend
policy in practice. Bonus Shares- regulation, reasons, deciding bonus ratio. Bonus shares and stock splits.

Unit 2: Cash Management and Receivables Management Cash Management- Motives of holding cash, Factors determining the cash balance, Managing the Cash Flow, Cash Budget, Cash Management models The Baumol Model, The Miller-Orr Model. Receivables Management - Concept, Costs - Collection Cost, Capital Cost,
Delinquency cost, Default Cost. Benefits of Management of Receivables, Credit Policies- Evaluating the Debtor; Credit Analysis and Decision, Credit Terms and Collection Policies. Control of Account Receivables, Heuristic Approach

Unit 3: Corporate Restructuring
a) Reasons for merger, Mechanics of Merger, Cost Benefits of Merger, Terms
of Merger, Takeovers, Joint ventures, Managing and acquisition,
b) Portfolio Restructuring, Financial Restructuring, Organizational Restructuring.

Unit 4: Financial Management in Sick Units- Definition of Sickness, Causes of Sickness, Symptoms of sickness,
Prediction of Sickness, Revival of a Sick Units.