THE PRESBYTERIAN INIVERSITY OF EAST AFRICA

MASTER OF BUSINESS ADMINISTRATION

Course Code: FIN 501

Course Name: Financial Management
Credit hours: 3
Instructor: Edwin Kibuthu
Prerequisites: ACC 501 (Financial Accounting)

Objective of the Course

This is an introductory course in financial management. We provide the student with

basic concept of corporate finance, investment and financing concepts, which are
important to Managerial Students. Students are required to learn the content and scope of
financial management and the vital role-played by a Financial Manager.

Course Content

PART I: FUNDAMENTAL CONCEPTS OF FINANCIAL MANAGEMENT

- An Overview of Financial Management and the Financial Environment

- Time Value of Money
- Financial Statements, Cash Flow, and Taxes
- Risk and Return: The Basics
- Risk and Return: Portfolio Theory and Asset Pricing Models

PART II SECURITIES AND THEIR VALUATION

- Bonds and Their Valuation

- Stocks and Their Valuation
- Financial Options and Their Valuation

PART III PROJECTS AND THEIR VALUATION

- The Cost of Capital

- The Basics of Capital Budgeting: Evaluating Cash Flows
- Cash Flow Estimation and Risk Analysis

1
 - Real Options

PART IV CORPORATE VALUATION

- Analysis of Financial Statements

- Financial Planning and Forecasting Pro Forma Financial Statements
- Corporate Valuation, Value-Based Management, and Corporate Governance

PART V STRATEGIC FINANCING DECISIONS

- Capital Structure Decisions: The Basics

- Distribution to Shareholders: Dividends and Repurchases

PART VI TACTICAL FINANCING DECISIONS

- Initial Public Offerings, Investment Banking, and Financial Restructuring

- Lease Financing
- Hybrid Financing: Preferred Stock, Warrants, and Convertibles

PART VII SPECIAL TOPICS

- Working Capital Management

- Derivatives and Risk Management
- Bankruptcy, Reorganization, and Liquidation
- Mergers, Acquisitions, Divestitures, and Holding Companies
- Multinational Financial Management

Textbooks

Brigham, E.F. and M.C. Ehrhardt (2005), Financial Management: Theory and Practice,
Thomson South-Western.

I.M Panday. (2005). Financial Management.

Orina S. (2010). Advanced Financial Management.

Course requirements

Class attendance and in-class discussion (25%), homework (30%), midterm (20%), final
exam (25%)

Correspondence

E-mail:ekibuthu@yahoo.com

O722 763360