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Part 1
Course Guide

BMMF5103
Managerial Finance
BMMF5103
Managerial Finance
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BMMF5103 Managerial Finance

Part 1: Course Guide


Contents

WELCOME TO BMMF5103 MANAGERIAL FINANCE
x General aim of the course
x Objectives of the course
x Course overview
x Overview of topics
STUDYPATHS FOR SUCCESS IN THE COURSE
GUIDE TO ASSESSMENT IN POST-GRADUATE COURSES AT OPEN
UNIVERSITY MALAYSIA
Assessment format
x Facilitator-Marked Assignment (FMA) (55%)
x Final Exam (40%)
x Online Participation (5%)
References
CONCLUDING REMARKS

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Managerial Finance
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General Aim of the Course

The course aims to give you a foundation in managerial finance and explain why
it is important for all functional managers to understand managerial finance.


Objectives of the Course

After completing this course, you should be able to:
1. Identify the key objective of firm and understand the key concepts in
financial management;
2. Evaluate the financial performance and position of a company;
3. Evaluate the value of stocks, bonds and projects; and
4. Evaluate the various sources of financing.



WELCOME TO BMMF5103

The course BMMF5103 Managerial Finance is one of the required courses
for the Master of Business Administration (MBA) programme. The course
assumes little previous knowledge and experience in financial management.
However, you are encouraged to relate and integrate your work experience
into this course. This is a three (3) credit course conducted over a 14 week
semester.
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A. Course Overview
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 financial management
is essential for managers to perform their financial duties.
To enable you to understand Managerial Finance BMMF 5103, we divide this
course into three topics that are the foundation of the course. These topics are
shown in the table below.

Table 1: Schedule of Topics

Topic Title Schedule
1 Fundamental Concepts of Financial Management Weeks 1-5
2 Securities and Their Valuation Weeks 6-10
3 Projects and Their Valuation Weeks 11-14


Each of these three topics is guided by a Study Guide which is
communicated to you through (a) the online forum in myLMS before the
first tutorial and (b) in print form after you have registered for the
course.
You will follow the scheduled weekly activities and discussions assigned to you in
the Study Guide for the duration of the course. All topics and activities are based
on the assigned textbook and discussion on a topic is carried out both in the
online forum and in the face-to-face tutorials. Please remember that
deliberation on a single topic will be carried out according to a fixed
schedule as presented in the Study Guide. It is important that you participate
in online discussions and group activity so that you can understand each topic
completely.
In the sections below, an overview of the course and a description of the content
of each topic are provided.
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B. Topic Overview
Topic 1: Fundamental Concepts of Financial Management

Chapter 1: An Overview of Financial Management.
It introduces the various types of organisations, goals of the
corporation and agency relationship.
Chapter 3: Financial Statements, Cash Flows, and Taxes
It Introduces and explains the purpose of balance sheet, profit
and loss statement and cash flow statement.
Chapter 13: Analysis of Financial Statements
Using ratio analysis to evaluate the liquidity position, leverage,
profitability and asset management ability of the company.
Chapter 4: Risk and Return: The Basis
It introduces the parameters used in investment decision and
benefits of diversification.
Chapter 2: Time value of Money
It introduces the importance of time line, future and present
values for both even and uneven cash flows.
Topic 2: Securities and Their Valuation

Chapter 5: Risk and Return: Portfolio Theory and Asset Pricing Theory
It shows how portfolio return and risk are computed for the
assets. The various factors affecting the portfolio risk are also
explained. The popular asset pricing is presented and
demonstrated how the required rate of return of an asset is
determined.

Chapter 6: Bonds and Their Valuation
It discusses the key features of bonds and their valuation. This
includes bonds with semi-annual coupon and the impact on bond
prices when there is a change in market interest rate.
Chapter 7: Stocks and Their Valuation
It discusses the key features of stocks and the legal rights and
privileges of shareholders and stocks valuation.
Topic 3: Projects and Their Valuation

Chapter 9: The Cost of Capital
It demonstrates the techniques used in determining the cost of
debt, preferred shares and common stock. Weighted average cost
of capital is then computed.
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Chapter 10: The Basics of Capital Budgeting: Evaluating Cash Flows
It discusses the importance of capital budgeting, project
classification, capital decision rules and the various methods for
evaluating projects viability.
Chapter 11: Cash Flows Estimation and Risk Analysis
It focuses on estimating relevant cash flows, tax effects, inflation
on cash flows.
LEARNING SUPPORT

1. Tutorials
There are 15 hours of face-to-face tutorials provided in support of the
course. There will be FIVE tutorial sessions of 3 hours each. You will be
informed on the dates, times and location of these tutorials, together with
the names and phone number of your facilitator, as soon as you are
allocated a tutorial group.
2. MyLMS Online Discussion
Besides the face-to-face tutorial sessions, you have the support of online
discussions in myLMS with your facilitator and your coursemates. Your
contributions to online discussions will greatly enhance your understanding
of course content, and help you as you read the assigned text, do the
assignment and prepare for the examinations.
3. Feedback and Input from Facilitator
As you work on the activities and the assigned text, your facilitator will
provide academic assistance throughout the duration of the course. The
facilitator will also mark your assignment and give you the feedback on your
performance. Should you need any assistance, do not hesitate to discuss
your problems with your facilitator. The tutorial sessions and the online
forum can also be used for any of the following situations:
x when you have difficulty with the self-tests and activities;
x when you have a question or problem with the assignment;
and
x when you do not understand the assigned readings.
It is important to bear in mind that communication is important for you to
be able to get the most out of this course. Therefore you should, at all
times, be in touch with your facilitator and coursemates, and be aware of all
the requirements for successful completion of a course.
4. The Digital Library
For the purpose of referencing materials and doing library-based research,
OUM has a comprehensive digital library. For this course you may use the
following databases: infotrac, proquest and ebsco. From time to time,
materials from these databases will be assigned for additional reading and
activities.
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STUDYPATHS FOR SUCCESS IN THE COURSE

1. Time Commitment for Study
You should plan to spend about 20 hours on each topic, which includes the
time spent doing all activities, self-tests, and suggested readings. You ought to
schedule your time to discuss your work online and spend enough time on each
topic for this course. It is often more effective to distribute the study hours over a
number of days rather than spend a whole day studying one topic.
2. Proposed Study Strategy
The following is a proposed strategy for working through the course. If you
have difficulty following the suggested strategy, discuss your problems with
your facilitator either through the online forum or during the tutorial sessions.
(i) The first and most important step is to read the contents of this Course
Guide thoroughly.
(ii) Organise a study schedule. Note the amount of time you are expected
to spend on each topic, the submission date of the assignment, tutorials
and the examination dates. Put all this information in one place, such as
your diary or a wall calendar. Whichever method you choose, you should
decide on and jot down your own dates for working on each topic. You
have some flexibility as there are 3 topics spread over a period of 14
weeks.
(iii) Once you have created a study schedule, make every effort to stick to
it. The main reason students are unable to cope is that they delay their
course work.
(iv) To begin work on a topic, do the following:
x Study the Topic Overview and examine the relationship of one
topic to the other topics.
x Do all assigned Activities and conduct the Self-test to see if you
have understood the various concepts and facts presented in a
topic.
x Use the Summary and the Key Terms to check if you understand
what you have just read.
x Do all Readings to gain knowledge of the various dimensions of
the course.
x Work on your assignments as the semester progresses so that you
are able to systematically produce a commendable report or paper.
(v) When you have completed a topic, review the Learning Outcomes to
confirm that you have achieved them and that you are, in fact, able to do
what is required.
(vi) After completing all topics, review the course content to prepare for the
final examination. Review the objectives of the course to see if you have
covered all the relevant parts of the course.
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GUIDE TO ASSESSMENT IN POST-GRADUATE
COURSES AT OPEN UNIVERSITY MALAYSIA

In the following pages, the Assessment Guide explains the basis on which you will
be assessed in this course during the semester. It contains details of the
facilitator-marked assignment, the final examination and participation required
for the course.
One element in the assessment strategy of the course is that all students should
have the same information as their facilitators about how performance on the
various tests and assignments is assessed. For this reason, this guide also
contains the marking criteria that will be used to assess the work you submit for
each requirement.
Please read through the entire guide at the beginning of the course.
Assessment Format

There are THREE aspects to the assessment of the course: assignment, final
examination and participation. A summary of the assessment requirements and
the dates for these requirements are shown in the table below.
Table 2: Assessment Format
Component Marks Due Date
Final Exam
Final Exam (3 hours) 40%

Examination
week at the end
of the semester
Assignment 55% Seminar 4
OLP
5%
End of semester
before
examination
week
1. FACILITATOR-MARKED ASSIGNMENT (55%)

There is ONE Facilitator-Marked Assignments (FMA) in this course and it
accounts for 55% of the total course assessment. You need to complete the
activities for topics 1, 2 and 3 before working on the assignments.
You will begin by accessing the assignments in the online forum and
complete the assignment using the information and materials contained in
the Study Guide and the Assigned Text. However, it is desirable in all
graduate level education to demonstrate that you have read and researched
more widely than the required minimum. Using other references will give
you a broader perspective on the course, and may provide a deeper
understanding of the subject.
When you have completed the assignments, submit it, together with a FMA
form, to your facilitator. Make sure that your assignments reach the
facilitator on or before the deadline.

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General Criteria for Assessment of Assignment

In general, your facilitator will be expecting you to write clearly, using correct
spelling and grammar. Your facilitator will be looking for evidence that you have
done the following:
a) Reflected critically on issues raised in the course.
b) Considered and appreciated a range of points of view, including those in the
course, and developed your own view.
c) Stated your argument clearly with supporting evidence and proper referencing
of sources.
d) Drawn on your own experiences and integrated this information in the paper.
2. FINAL EXAMINATION (40%)

The FINAL EXAMINATION accounts for 40% of the total course assessment and it
usually lasts 3 hours. The examination covers materials from the course content
and it aims to examine if the learning outcomes of the course have been
achieved. Students should demonstrate that they have achieved these outcomes
in the examination.
The questions in the final examination are closely related to questions in the
Study Guide and all areas of the course will be assessed. Hence you may find it
useful to review all items in the Study Guide in preparation for the examination.
3. ONLINE PARTICIPATION (5%)

From time to time, you will be required to work on activities posted in the online
forum in myLMS for the various topics of the course. Your facilitator may ask you
to respond to a question or issue or to comment on some of the content covered
during the face-to-face tutorial sessions. You may also be asked to discuss the
assignments in the online forum so that you and your course mates benefit from
deliberation and debate on course content.
It is therefore important to participate in the online forum often and respond to the
questions or comments of a classmate or the facilitator. Your specific responses will
be graded on the basis of quality, and the integrated assessment scheme for this
purpose is presented below. Your participation in the discussion, particularly the
degree to which your contribution indicates knowledge of the readings and
thoughtfulness on your part, is deemed important. The way your personal
contributions create interest and move the discussion forward will be used to
determine your grade for this component of the course.
You will be assigned a maximum of 5% of your overall grade for participation in
tutorial sessions and online discussion sessions. Your participation, through
discussion with fellow students and the course facilitator, is very important to the
understanding of subject matter.
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Table 3: The Integrated Assessment Scheme for Online Participation

Category Description Points
High
i. High quality contributions focused on task; strong evidence
of learner having generated discussion, analysed
information, drawn conclusions and helped create a lively
debate
ii. Contributions have been regular and varied without long
lapses between postings
5
iii. Contributions have been focused on the task; some
evidence of analysis, sharing and teamwork
iv. Learner has been present online but postings have been
few and far between
4
Moderate
v. Some contributions have been focused on the task;
however there little or no evidence of analysis, sharing and
teamwork
vi. Student is not an active contributor
3
Low
vii. Some contributions have been focused on the task; little or
no evidence of analysis, sharing and teamwork
viii. Learner is rarely present online
2
ix. Contributions have been minimal with little evidence of
task focus
1 No
Participation
x. Zero contributions have been made toward the discussion
or task
0

PLAGIARISM

What is Plagiarism?
(Note: This information has been sourced from: www.psych.mcgill.ca/ugrad)

Any written assignment (essays, project, take-home exams, etc) submitted by a
student must not be deceptive regarding the abilities, knowledge, or amount of
work contributed by the student. There are many ways that this rule can be
violated, and plagiarism may have been committed. Here are some examples of
plagiarism.
x Outright plagiarism: Large sections of the paper are simply copied from other
sources, and are not acknowledged as quotations.
x Paraphrasing: The student paraphrases a closely reasoned argument of an
author without acknowledging that he or she has done so. Clearly, all our
knowledge is derived from somewhere, but detailed arguments from clearly
identifiable sources must be acknowledged.
x Other sources: Essays or papers written by other students or sold by
unscrupulous organisations are submitted by students.
x Works by others: Taking credit deliberately or not deliberately for work
produced by another without giving proper acknowledgement. This
includes photographs, charts, graphs, drawings, statistics, video-clips, audio-
clips, verbal exchanges such as interviews or lectures, performances on
television and texts printed on the web.
x Double Credit: The student submits the same essay to two or more
courses.
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Avoiding Plagiarism
(Note: This information has been sourced from: http://www.homestead.com/)
x Insert quotation marks around copy and paste clause, phrase, sentence,
paragraph and cite the original source
x Paraphrase clause, phrase, sentence or paragraph in your own words and cite
your source
x Adhere to the APA (American Psychological Association) stylistic format,
whichever applicable, when citing a source and when writing out the
bibliography or reference page
x Attempt to write independently without being overly dependent of information
from anothers original works
x Educate yourself on what may be considered as common knowledge (no
copyright necessary), public domain (copyright has expired or not protected
under copyright law), or copyright (legally protected).

Documenting Sources
Whenever you quote, paraphrase, summarize, or otherwise refer to the work of
another, you are required to cite its source parenthetical documentation. Here
are some of the most commonly cited forms of material. (Note: The reference for
this information is http://www.horton.ednet.ns.ca).
Direct Citation Simply having a list of thinking skills is no assurance that children will
use it. In order for such skills to become part of day-to-day behaviour,
they must be cultivated in an environment that value and sustains
them. Just as childrens musical skills will likely lay fallow in an
environment that doesnt encourage music, learners thinking skills
tend to languish in a culture that doesnt encourage thinking
(Tishman, Perkins & Jay, 1995, p.5)
Indirect Citation According to Wurman (1988), the new disease of the 21
st
century will
be information anxiety, which has been defined as the ever-widening
gap between what one understands and what one thinks one should
understand.

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Referencing

All sources that you cite in your paper should be listed in the Reference section at
the end of your paper. Heres how you should do your Reference page. (Note:
The reference for this information is owl.english.purdue.edu/handouts).
From a Journal Brown, E. (1996). The lake of seduction: Silence, hysteria, and
the space of feminist theatre. JTD: Journal of Theatre and Drama,
2, 175-200.
From an Online
Journal
Evnine, S. J. (2001). The universality of logic: On the connection
between rationality and logical ability [Electronic version]. Mind,
110, 335-367.
From a Webpage National Park Service. (2003, February 11). Abraham Lincoln
birthplace national historic site. Retrieved February 13, 2003,
from http://www.nps.gov/abli/
From a Book Fleming, T. (1997). Liberty! The American revolution. New York:
Viking.
From an Article
in a Book
Cassel, J., & Zambella, B. (1996). Without a net: Supporting
ourselves in a tremulous atmosphere. In T. W. Leonhardt
(Ed.), "LOEX" of the West: Teaching and learning in a climate of
constant change (pp. 75-92). Greenwich, CT: JAI Press Inc.
From a Printed
Newspaper
Holden, S. (1998, May 16). Frank Sinatra dies at 82: Matchless
stylist of pop. The New York Times, pp. A1, A22-A23.

CONCLUDING REMARKS
This course aims to give you a foundation in managerial finance which provides
the fundamental concepts, asset analyses and valuations, and sources of
financing.
We wish you success with the course and hope that you will find it interesting and
useful for your development as a professional. We hope you enjoy your
experience with OUM and will continue your work as a life long learner with us.

REFERENCES
Brigham, E. F., & Ehrhardt, M. C. (2005). Financial management - Theory and
practice (11th ed.). South Western: Thomson Publishing.
McGuigan, J. R., Kretlow, W. J., & Moyer, R. C. (2006). Contemporary financial
management (10th ed.). South-Western: Thomson Publishing.