Course Outline

Welcoming Note
Welcome to BMMF 5103 : Managerial Finance.
Finance is an exciting yet interesting, challenging and ever-changing discipline. With the emergence of
liberations and globalisation, new technology and innovations have brought a profound impact on the
financial practices and markets. Managers are concerned with acquiring, financing and managing the
business assets under these changes. Thus knowledge on managerial finance is essential for managers
to perform their financial duties.


Program Masters In Business Administration

Module
Managerial Finance
Code BMMF 5103
Status Core Course
Level Master
Credit Hours 3 Credits (120 hours of learning in a semester)
Pre-requist None
Evaluation
60% Coursework
40% Final Exam
Lecturer Assoc. Prof. Loo Sin Chun
Semester
Taught
May 2004
Objectives The course is designed to provide an overview of the basic concepts and
principles of financial management, with particular emphasis on risks, rates
of return, and valuation.
Synopsis The course will focus on theories, concepts, and principles as opposed to
institutional materials, although some institutional background is also
presented.
Since this course is required of all MBA students, and not just finance
majors, a great deal of materials will be covered, but in-depth treatments
will be left to follow-on courses.

Module
Structure
Title / Topics
Total Learning
Hours
UNIT 1 Overview of Financial Management
Financial Objective of Firms
40

The Financial Environment: Markets,
Institutions and Interest Rates
Risk and Return:
Measuring risk and return
Risk-return trade-off
Financial Statement Analysis
UNIT 2 Time Value of Money
Compounding & Discounting
Present & Future Value
Annuity
Valuation of Assets
General Valuation Model
Bond Valuation
Stock Valuation
Capital Budgeting
Net Present Value (NPV)
Profitability Index (PI)
Internal Rate of Return (IRR)
Modified Internal Rate of Return
(MIRR)
Conflict between NPV & IRR
Cash Flow Estimation and Other Topics in
Capital Budgeting
Risk Analysis in Capital Budgeting
The Cost of Capital
Component cost of debt and equity
Weighted average cost of capital
40
UNIT 3 Capital Structure Decisions: The Basics
Traditional View of Capital Structure
Alternative view of Capital Structure
Dividend Decisions: The Basics
Long-Term Financing Decisions
Long-Term Loans
Preference Shares
Ordinary Shares
Working Capiral Management (WCM)
Current Asset Management
Current Liability Management
Risk-Return Trade-off in WCM
40

TOTAL 120
Reference Compulsory Brigham, E.F., Gapenski, L.C. and Ehrhardt,
M.C.(2002), Financial Management: Theory and
Practice, Harcourt College Publishers, 10th Edition.

Additional Copeland, T.E. and Weston, J.F. (2003), Financial Theory
and Corporate Policy, 3
rd
Edition, Addison Wesley.
Van Horne, J.C.(2002), Financial Management and Policy,
12th Edition, Prentice-Hall, 11e.
Gitman, L.(1997), Managerial Finance, 8th edition. Addison-
Wesley.
Brealey, R.A. and Myers, S.C.(2003), Principles of
Corporate Finance, McGraw-Hill International, 5e.
Bank Negara Malaysia (1999), The Central Bank and the
Financial System in Malaysia - A Decade of Change
1989-1999, Bank Negara Malaysia.

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