Course Syllabus

University of Dhaka
Department of International Business
BBA 8th Batch, 2nd Year, 2nd Semester
IB-206: Principles of Finance

Objective of the Course

The core objective of this course is to develop an
understanding of guiding principles and activities of
the finance in business enterprises. It also aims to
equip students with necessary skills to undertake
financial analysis of the enterprises. Thus the course
will encompass the conceptual definition ad
importance of business finance, areas and activities of
finance, decisions related to finance, agency theory,
cash flow and its estimations, sources of finance, cost
of capital, time value of money, capital budgeting,
leverage and break-even analysis, working capital and
current asset management, and basic financial
statement analysis tools.

2. Sources of Finance
Short term, Intermediate term and Long term sources
of finance and their evaluation methods

Course Instructor
Saiful Islam, Lecturer, Department of International
Business, University of Dhaka
Contact: +8801911 463733,
Email: saifulmubin89@gmail.com

5. Cost of Capital
Concepts and significance, Cost of the capital of the
firm, Cost of long term debt, Preferred stock and cost
of common stock, weighted average cost of capital

Text Books
1. Lawrence J. Gitman and Chad J. Zutter.
Principles of Managerial Finance (13/e).
Pearson Education Inc. 2012.
2. James C. Van Horne and John M. Wachowicz.
Fundamentals of Financial Management
(13/e). Pearson Education Inc. 2008.
3. M. Y. Khan and P. K. Jain. Financial
Management: Text, Problems and Cases
(6/e). McGraw Hill Education. 2011.
Contents
1. Introduction to Financial Management
The definitions and functions of financial
management,
Goal
of
financial
managers,
Organization of the financial management functions,
agency theory in financial management, Profit
Maximization vs. Wealth Maximization

3. Time Value of Money

Compounding and Discounting, Calculations of
terminal value and present value of single and
multiple cash flow, Annuity, Present value and
terminal value of annuity, Loan amortization, Sinking
fund development and other applications of time
value of money
4. Financial Statement Analysis
Financial statement analysis using financial ratios,
Liquidity ratios, Activity ratios, Debt ratios,
Profitability and market ratios

6. Valuation of Financial Assets

Interest rate calculations, Stock valuation, Bond
valuations and Investment decision making principles
7. Risk and Return
Defining Risk and Return, Probability distribution and
risk measurement, Attitude towards risk, Portfolio
management, Diversification, Capital asset pricing
model, efficient financial markets
8. Capital Budgeting and Investment Rule
Definition, application and steps in capital budgeting,
Different concepts of capital budgeting, Methods of
capital budgeting- Payback Period, NPV, IRR and ARR
9. Capital Structure and Leverage
Capital structure issues, Traditional views and theories
of capital structure, Advance theories, Leverage
Grading Policy and Marks Distribution
AS per university rules

Other Instructions
**Every student is required to attend at least 75% of total classes and required to attend all scheduled examination,
assignments, presentation and class test on due date and time. For any unauthorized absent student will get zero on
that particular test. Course instructor will not excuse anyone regarding this issue and will not recommend to the
department authority for reduction of punishment or financial penalty.