Objectives :
i) To delineate contingent and thrust areas in the design and execution of financial strategies.
ii) To understand holistic strategic management of financial episodes confronting a firm in integrated and liberalised financial markets.
TOPICS:
1. Coporate Valuation and Value Based Management : Methods of corporate valuation : Discounted Cash flow method; Comparable Company method; Adjusted book value method; Rationale for shareholder wealth maximisation; Value based management systems; Marakon approach, Alcar approach, Mckinsey approach; Alignment of interest; Agency considerations; Corporate governance; Management compensation.

2. Capital Budgeting Strategy : Multiple investments and risk management - Simulation and portfolio approaches. Evaluation of managerial option to expand, contract, postpone and abandon projects. Capital Rationing - Concept, Causes and process - Methods -Aggregation, incremental, profitability index, postponement index, weighted index general linear programming approach, zero-one integer programming and goal programming. Allocating resources to divisions BCG approach. Capital budgeting and growth Bond refunding.

3. Treatment of external costs & benefits in investment decisions; Social Costs Benefit Analysis - Rationale and approaches, SCBA in India.

4. Mergers & acquisitions : Types - Horizontal, Vertical and Conglomerate - Characteristics, Theories of mergers - efficiency theories, information and signaling agency problems and managerialism, the free cost flow hypothesis, market power and tax considerations. Timing of merger activity. Valuation problems of M. & A. Cross boarder acquisitions - the role of exchange rates and takeover process, the trade off between costs and political instability.

5. Restructuring; Joint Ventures - financing and evaluation, rationale and role of JVS, Reasons for failure. Sell off and divestitures - types and motives explanations and rationale, regulatory frame work.

6. Takeover Defenses : Financial Defenses measures, coercive offers and defense, position pill defense, targeted share repurchase, stand still agreements, strategic reactions by targets.

7. Designing New Financial Instruments : Need - Environmental factors and intrafirm factors. A model for new product development - Directions, Design, testing and introduction, instrument preview. Investor motivations. Pricing efficiency, regulatory / policy constraints, market access, market expertise and desire to deal wit a single party. Issuer motivation - Arbitrage transactions and non-arbitrage transactions. Innovative products in the Indian Capital markets - Warrants, Convertibles etc., and their valuation.

8. Leasing & Hire Purchasing :

Leasing : Concept, Classification advantages & limitations, evolution of Indian leasing industry, product profile, funding aspects; and regulatory framework; legal and tax and accounting aspects of leasing in India; Leasing Vs. Borrowing; Break even rental for the lessor. Negotiating lease rental; concepts of Gross yield and add on yield Gross yield based pricing; IRR of a lease; IRR based pricing; Assessment of lease related risks.

Hire Purchase : Concept and characteristics. Mathematics of Hire Purchase; Legal and tax aspects; frame work for financial evaluation.

9. Financial Management in Sick Units : Definition of sickness; causes of sickness; symptoms of sickness; revival of sick units.

Suggested Readings :
1. Weston J.F., Chung K.S., Hoge S.E., 1996, Mergers, Restructuring and Corporate Control, PHI.
2. Marshal J.F., Bansal V.K., 1996, Financial Engineering, PHI.
3. Herbst A.F., 1990 Capital investing- Analyses and Strategies for investment in Capital Assets, Happer Business.
4. Sriram, K - 1992 Handbook of Leasing, Hire Purchase and Factoring, ICFAI, Hyderabad.
5. Shiva Ramu, S. 1998, Corporate Growth through Mergers and Acquisitions, Response Books, New Delhi.