SOUTHERN FEDERAL UNIVERSITY

Faculty of Economics

1-semester courseon

FINANCIAL MANAGEMENT

6 ECTS Credits

Developed by Inna Nekrasova,

Associate Professor at the Department of Finance and Credit

SYLLABUS

Aim of the course

This course gives you complete knowledge about financial management. Who is interested in planning and managing finances should do this course. As this way they get to know how to manage their finances more effectively. “Financial planning” is important in everyone’s life. There are no limitations on the basis of age; people of any age group can do this course. There are many organizations that are providing this course but you should know which organization is the best for you. You should go through the details of course and the organization from where you are thinking to do your course.

Everyone wants to have track on their money so that they will come to know how they can save more and manage their funds. And to maintain finance properly you have to apply some management principles. This includes careful planning, your attention, monetary strategies good knowledge and cash flow. Finance managers need it most to understand and to do Personal Financial Management Course as they usually have number of tasks and their decisions are really stressful. As they have maximize the wealth of the companies. If you are managing finance or at the position of finance manager then you should be disciplined and have experience in financial management, so that you should be capable of doing work under stress and pressure.

Teaching

The following methods and forms of study are used in the course:

Lectures

Seminars

Colloquium

Writing

Self-study

Use of different reference books and Internet resources

At the end of the course the students are supposed to write an essay, make an oral presentation and participate in discussion. Upon the successful completion, the students will gain 6 credits.

Techniques, Skills, etc.

After completing the course, the students are expected to be able to:

maximize the wealth of the companies;

manage current assets and current liabilities;

determine the optimal quantities of assets that firms should hold;

make capital budgeting analysis;

determine the firm’s optimal capital structure;

know the concepts of operating, financial and combined gearing;

discern correlation and interdependency between risk and return under each factor model;

discern and interpret different investment decisions;

account risk and rate of return real and portfolio investment;

understand and analyze efficiency appraisal method of investment projects and portfolio management;

know the motives for mergers and the possible benefits and costs of a merger;

know methods of defends from take-over;

make divestment and spin-off decisions;

present coherent arguments to answer questions both orally and in writing;

apply the tools and analytical skills to real-world situations.

Course content

№ / Subject / Form of Lesson / Duration / Date
MODUL 1. Fundamental theories of Financial Management
  1. 1.1
/ An Overview of Financial Management / Lecture / 2 hrs
  1. 1.2
/ Theory of Time Value of Money / Lecture / 3 hrs
  1. 1.3
/ Portfolio Theory / Seminar / 4 hrs
  1. 1.4
/ Asset Pricing Theory / Lecture / 3 hrs
MODUL 2. Capital budgeting. Capital structure, cost and valuation
  1. 2.1
/ Capital Budgeting under Certainty / Lecture / 3 hrs
  1. 2.2
/ Capital Budgeting under Uncertainty / Seminar / 3 hrs
  1. 2.3
/ Management of Working Capital / Lecture
Seminar / 2 hrs
2 hrs
  1. 2.4
/ Capital Structure and Valuation / Seminar / 4 hrs
  1. 2.5
/ The Cost of Capital / Lecture / 3 hrs
MODUL 3. Mergers and divestitures: theory and evidence
3.1 / Essence, Types and Motives for Mergers / Lecture Seminar / 3 hrs
2 hrs
3.2 / Dives and Spin-offs / Lecture Seminar / 2 hrs
2 hrs
Whole numbers of Lectures / 19 hrs
Whole numbers of Seminars / 17 hrs

Requirements

During the session students are required to

attend class lectures;

participate in seminars;

write an essay;

represent the main ideas of essay in oral presentation at the colloquium;

be prepared to participate in final course discussion.

An essay is a prose analysis on one of the prescribed topics given. For essay students should consult items from the booklist given with the essay title you choose. Students may use other items as well, but ensure that they are books or articles of relevance and equivalent scholarly standard to those on these lists. All recommended readings listed here are indicative rather than exhaustive. Students shouldn’t be afraid to add to the list from own literature searches.

An essay will be assessed to the following criteria: range and quality of readings, evidence of investigative effort, and relevance to essay question, awareness of relevant historians’ interpretations, use of primary evidence, analytical abilities and overall arguments. Recommended essay volume is approximately 2,500 -3,000 words.

Grade determination

Class participation - 20%

Written essay - 30%

Oral presentation – 20%

Participation in discussion – 20%

Reading

Core Reading

  1. Brigham E.F.. Gapenski L.C. Cases in Financial Management. Fort Worth. Tex.: Dryden, 1998
  2. Baker, M.,R. Ruback, and J. Wurgler. 2005. Behavioral corporate finance:a survey. In Handbook of Corporate Finance: Empirical Corporate Finance (ed.E. Eckbo), Part III, Chapter 5. Elsevier/North-Holland.
  3. Barberis,N. and R.H. Thaler. 2003. A survey of behavioral finance. In Handbook of the Economics of Finance (ed. G.Constantinides, M.Harris, and R.Stulz). Amsterdam: North-Holland.
  4. Bhattacharya,S.,A. Boot, and A. Thakor (eds).2004. Credit, Intermediation and the Macroeconomy. Oxford University Press.
  5. Constantinides, G.,M. Harris, and R. Stulz (eds).2003. Handbook of the Economics of Finance. Amsterdam: North-Holland.
  6. Corporate Controller's Handbook of Financial Management (2nd ed) by Joel G. Siegel (Author), Jae K. Shim (Author), Nicky A. Dauber (Author), Prentice Hall Trade; 2nd edition (August 1997)
  7. Graham,J. R. 2003. Taxes and corporate finance: a review. Review of Financial Studies 16:1075-1129.
  8. Grinblatt,M. and S. Titman. 2002. Financial Policy and Corporate Strategy, 2nd edn. McGraw-Hill Irwin.
  9. Jensen M. S. Studies in the Theory of Capital Markets. New York: Praeger, 1997
  10. Handbook of financial analysis, forecasting and modeling/ Jae K. Shim, Joel G. Siegel.- 2nd ed, 2004, CCH INCORPORATED.
  11. Landier, A. and D. Thesmar. 2004. Financial contracting with optimistic entrepreneurs: theory and evidence. Mimeo, New York University and HEC,Paris.
  12. Lewellen, J.and K. Lewellen.2004. Taxes and financing decisions. Mimeo, MIT.
  13. Mendenhall W., Schaeffer R.L., Wackerly D.D. Mathematical Statistics with Applications. Boston: Duxbury, 1999
  14. Panageas,S.2004. Speculation, overpricing, and investment: theory and empirical evidence. Mimeo, Wharton School.
  15. Pathak,P. and J. Tirole.2005. Pegs, risk management, and financial crises. Mimeo, Harvard University and IDEI.
  16. Payk P., Nil B. Corporative Finance and Investment. New York: McGraw-Hill, 2006
  17. Reilly F. K. Investment Analysis and Portfolio Management. Hinsdale, III.: Scott, Foresman, 1998
  18. Richard J. Sweeney "The market value of debt, market versus book value of debt, and returns of assets - includes appendices". Financial Management (Financial Management Association). FindArticles.com. 20 Nov, 2011.
  19. The Essentials of Risk Management by Michel Crouhy, Dan Galai and Robert Mark (Dec 14, 2005)
  20. The Handbook of Structured Finance by Arnaud de Servigny and Norbert Jobst (Jan 22, 2007) -Kindle eBook
  21. Finance Director's Handbook by Sonia McKay, Glynis D Morris and Andrea Oates (Jun 26, 2009) -Kindle eBook
  22. Sharp W.F, G. J. Alexander, J. V. Bailey. Investments. Prentice- Hall, 2007.

Additional Reading

  1. Baker,M. and J. Wurgler. 2002. Market timing and capital structure. Journal of Finance 57:1-32.
  2. Bolton P. and M. Dewatripont. 2004b. Smoothing sudden stops. Journal of Economic Theory 119:104-127.
  3. Gompers,P. and J. Lerner. 2003. The really long-run performance of initial public offerings:the pre-Nasdaq evidence. Jornal of Finance 58:1355-1392.
  4. Hennessy,C.A. and T. Whited. 2005. Debt dynamics. Journal of Finance 60:1129-1165.
  5. Malmendier,U. and G. Tate. 2005. CEO overconfidence and investment. Journal of Finance, in press.
  6. Pastor,L. and P. Veronesi. 2005. Rational IPO waves. Journal of Finance 60:1713-1757.
  7. Shleifer,A. and R. Vishny.2003. Stock market driven acquisitions. Journal of Financial Economics 70:295-311.

Internet Resources

Contact

Inna Nekrasova,