course outlines
TRANSCRIPT
COURSE-OUTLINE
Quaid-e- Azam university
School of Management sciences
Spring Semester, Academic Session 2014
Course Title: Advanced Financial Managemnt
Class: MBA
Prerequisites: Financial Accounting, Management Accounting
Financial Management, Principles of Economics
Mode of Delivery: Face-to-Face
Contact Details+92 343 5000087
MPORTANT NOTE: This course syllabus is a working outlines for our semester. It is your responsibility to read everything stated in this document and meet all the requirements in order to complete the ( Advanced Financial Management) course successfully. If you do not read the whole course outlines and do not meet the requirements entailed therein, you will take the responsibilities for any misunderstanding, misinformation, or anything that may affect your grade.
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Advanced Financial Management: COURSE DESCRIPTION:Advanced Financial ManagementThe aim of this course of study is to broaden the theoretical and analytical skills of students with respect to the funding and investment decisions made by senior finance executives. The learning objectives of the course are to Collect, interpret and analyse financial data relating to a number of key concepts regarding fund raising and capital structure in a variety of business contexts and their impact in different international financing scenarios. It also aims to Compare, contrast and evaluate merger proposals, lease and project financing proposals especially in aninternational financial management setting. One of the key objectives of the course is to identify measure and manage the financial risks faced by corporate particularly multinational companies.
COURSE OBJECTIVESCourse Objectives:At the end of the semester students should have an understanding of:
Roles of senior finance executives particularly in Multinational context
Corporate governance issues and agency theory Advanced investment appraisal techniques particularly Adjusted
present value and option valuation method
Valuation of companies particularly in case of merger and acquisition
Identification, measurement and management of currency risk Interest risk management particularly multinational companies
by using derivative instruments: options, futures and swaps Overview of Islamic financing
Recent financial management Issues such as Dark Pool trading, behavioral finance
METHODS OF LEARNING
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A variety of techniques will be used to enhance participants learning for this course. Therefore, face-to-face lecture, classroom discussions of assigned material, case study discussions, team presentations, guest lectures and active learning exercises. You are expected to come to every session having completed your reading and/or other assignments.
COURSE EVALUATION Though much of the learning is actually achieved in-class, students are expected to complete the certain assignments and exams in order to pass the subject. The assessment, set out below, is designed to evaluate the outcomes.
1. FINAL EXAMINATION (Centrally Conducted) 75 (3 hours)
2. COURSE WORK 75
Quizzes 25 FINAL PROJECT OR PRESENTATION 25 MID TERM EXAMS (Centrally Conducted) 25
OVERVIEW OF 15 WEEKS SEMESTER SCHEDULE
Week
s
Scheduled Topic
Class Activities
Week1
Course Overview Advanced Appraisal Methods
Overview of basic appraisal techniques Introduction of Advanced appraisal
techniques such as Duration Weaknesses of Internal rate of return
Formation (not more than three)
3
Week
s
Scheduled Topic
Class Activities
Modified Internal rate of return
Week 2
Calculation and Application of Weighted average cost o capitalNeed for Risk Adjusted WACCBeta AssetLeveraged BetaHamda equation
week3
Adjusted present value (APV) Rationale of APV Mechanism of APV Advantages of APV Dis Advantages of APV Case study relating to APV
Week4
Risk and uncertainty in Investment Appraisal
Risk and uncertaintySensitivity AnalysisDecision TreeSimulation
Capital RationingHard Vs Soft RationingSingle period Capital RationingMulti period Capital RationingLinear programming Simplex methodDual Value
Week5
Introduction of Derivative & Real Option Valuation
Introduction of derivatives Types of derivatives Application of derivative products Types of options Cost of options, Black –Scholoes valuation method Options to defer Options to abandon
4
Week
s
Scheduled Topic
Class Activities
Options to sell
Week6
Investment appraisal in international contextInternational Tax treatyInternational CAPMPurchasing Power ParityInterest Rate ParityCapitalization rate in context of multinational companiesAppraisal in case multinational companies
Week7 Risk& Return
Defining Return, Defining Risk, Expected Return Using probability Distributions to Measure
Expected return Discrete Probability Distribution,
Normal probability Distribution, Risk Calculation of a single security
Portfolio return and risk Expected return of portfolio Diversification systematic and unsystematic Risk introduction to capital Asset pricing
model, Market efficiency hypothesis, The systematic Risk Index, The Security market Line, Find Required rate of return by using
CAPM, the Concept of Under priced And Overpriced stocks
Case: Discussion on problems
Week8
Capital structure Debt versus Equity Capital Structure And Financial Leverage Financial Leverage and Risk Capital Structure and Taxes Capital structure theories
Mini Case study on Time Value of
Money:
Week Valuation of Mergers and Acquisitions
5
Week
s
Scheduled Topic
Class Activities
9 Mergers, takeover and acquisition Asset based valuation Earning based valuation Market based valuation Free Cash based valuation
Week10
Currency risk management Currency risk Types of currency risk Money market hedge Forward hedge Future hedging
Week11
Options hedging Options strategy to manage currency risk Multilateral netting Matching Leading and lagging Introduction to swaps Foreign swaps Currency swaps
Week12
Interest Rate Risk Management Interest risk and its types Gap Analysis Yield curve theory Forward rate agreement
Week13
Future contracts Options strategies for interest risk
hedging Interest Swaps Swapations Collar hedging
Week14
International transfer pricing Dividend theories Practical dividend policies Divisionalised companies Transfer pricing Objectives of transfer pricing Transfer pricing for MNCs
Week Over view Islamic Finance
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Week
s
Scheduled Topic
Class Activities
15 Differences between traditional and Islamic finance Concept of RibaIjraMudarbahMurabhaMusharkaSukook
Week 16
Corporate Restructuring Predicting corporate failure Models to predict corporate failureCapital restructure schemes for failing companiesCapital restructure schemes for solvent companies
IMPORTANT NOTICE : Please note that this is a tentative outline and changes can be made, depending on the progress. However, the timeframe of the class activities; assignments and final project are fixed and no changes will be made.
REQUIRED COURSE MATERIALSRecommended Text Book(s):
Intermediate Financial management by Brigham 8th edition Advanced Financial Management by Emile Wolf
Reference Book(s):
Managerial Finance by GitmanApplied corporate finance by DamudranInternational corporate finance by MaduraInvestment Analysis and Portfolio Management by Reilly and Brown
Web http://www.finpipe.com,http://www.financewise.com
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http://www.finance.yahoo.com
Journal(s): Journal of corporate financeJournal of FinanceJournal of portfolio Management PLAGIARISM Plagiarism is an attempt to pass someone else’s work off as your own. This is an issue that the Department of Business Administration takes very seriously. Honesty and integrity are critical attributes in both our professional and personal lives. It is expected from you to maintain a very high standard of academic honesty. Plagiarism may result in a grade reduction or other penalties as described in University Code.
CLASS RULES Your enrollment in this course indicates your agreement to follow the class rules. This means:
Be on time to class and don’t leave early Be quiet when someone else is “officially” speaking Don’t read newspapers or do outside work in class Leave the classroom as clean – or cleaner – than you found it. Keep your mobile switched off during lecture hours
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