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Strategic Finance: Course Outline

Course Outline

  • What is strategy
  • Types of strategies 
  • Corporate strategy 
  • Business strategy
  • Financial strategy
  • Potential strategic financial objectives of an organization(e.g. value of money, Maximizing shareholders wealth)
  • Relationship between decisions concerning investment
  • Financing and dividends
  • Impact of internal and external constraints on financial strategy.(e.g. funding, regulatory bodies, investor relations, economic factors)
  • Financial markets and financial instruments
  • Agency theory and Finance
  • Identifying investment opportunities and objectives
  • Evaluating investments in terms of return: expected return, required return and realized return
  • Ideas of diversifiable and non-diversifiable risks: in terms of portfolio
  • Market equilibrium and market efficiency: CAPM and APT
  • Discussion of financial markets and financial instruments
  • Various types of Stocks and bonds available in markets
  • Valuation techniques used to evaluate stocks and bonds
  • Calculation of cost of equity using dividend growth model

Course Outline

  • Calculating the cost of redeemable and irredeemable debt, including the tax shield on debt.
  • WACC: Logic of cost of capital & sources of funds
  • Identification of project’s relevant cost (i.e. infrastructure, marketing), benefits(i.e. incremental effects, future cash flows) and risks( i.e. financial & nonfinancial)
  • Calculation of projects net present value and internal rate of return including techniques for dealing with cash flows
  • Use of weighted average cost of capital to assess budgeting techniques
  • Effect of taxes and inflations on the techniques
  • Valuation basis of assets(i.e. historical costs, replacements cost), earnings(i.e. price earning and earning yield) and cash flows
  • Capital structuring and capital rationing
  • Consideration in the formulation of dividend policy and dividend decisions, including meeting the cash needs of the business
  • Miller & modigliani dividend Irrelevance theory.
  • Clientele effects and Ex-date effects
  • Dividend announcement date effects: the signaling hypothesis
  • Cash dividends, stocks dividends and stock splits
  • Working capital management strategies: Cash and stock management models
  • Calculation of operating and cash cycles
  • Analyzing various budgets including cash budget, sales budget, purchase budget etc.
  • Management techniques for account receivable and accounts payable