FIN 223: MANAGERIAL FINANCE

i Course Title: FIN 223:MANAGERIAL FINANCE

ii Course Aim: To provide students with the theory, principles and practices of
financial management, including basic models for the
determination of the value of the firm, and how these form the
basis for decisions in financial planning and control, current
asset management, capital budgeting decisions, capital structure
decisions, cost of capital and dividend policies of the firm.
iii Course expected At the end of this course, the student should be able to:
learning  Describe financing strategies.
outcome(s):  Appraise projects for investment purposes.
 Assess the capital structure of business firms.
 Evaluate corporate dividend policy.
 Demonstrate how financial markets work and their usefulness
in economic development

iv Course status-core Core

or elective:
v Credit rating: 12 credit points
vi Total hours spent: 120
vii Course Content: 1. THE NATURE AND SCOPE OF MANAGERIAL
FINANCE AND PRINCIPLES OF FINANCIAL
RETURNS
 The Concept of Managerial Finance
 The Goals of the Firm
 Profit and wealth maximization objectives of investors
 The Roles of Financial Manager
 Agency theory
 Firm’s expected returns and risks
2. FINANCIAL MARKETS (MONEY AND CAPITAL
MARKETS)
 The purpose of financial markets
 Types of Financial markets
 What constitutes the Financial Markets
 Capital markets without security markets
 Capital markets with security markets
 Dar-es-salaam Stock Exchange Structure
 Roles and Functions of the Dar-es-salaam Stock Exchange
 Roles and Functions of the Capital Markets
Security Authority

 Procedures in Dar-es-salaam stock Exchange

  Effects of not having stock exchange
markets

 Financial Institutions in Tanzania and Acts

related to Financial Activities.

3. SHORT-TERM FINANCING AND WORKING CAPITAL

 The Management of Working Capital
 Working capital fundamentals

 Working capital strategies

 Management of cash and marketable

securities

 Management of receivables and inventories

 Short - Term Financing:

 Secured sources of short-term loans

 Unsecured sources of short-term loans

 Spontaneous sources of short-term financing

4. LONG TERM FINANCING

 Raising Equity Capital
 Equity financing for private companies

 Going public – IPO

 Debt Financing
 Corporate bonds

 Bond covenants

 Leasing
 Financing lease

 Operating lease

5. CAPITAL BUDGETING (INVESTMENT) DECISIONS

 Concepts of capital budgeting
 Preparing cash budgets
 Methods of evaluating investment alternatives
 Capital rationing
 Payback period
 IRR
 Accounting Rate of Return
 Net Present Value and Capital Budgeting
 Methods of evaluating investment alternatives
 Capital Rationing and its types
6. COST OF CAPITAL AND CAPITAL STRUCTURE
 Cost of capital
  Capital structure
 Weighted Average Cost of Capital and Weighted Marginal
Cost of Capital
 Capital structure in practice.
7. PORTFOLIO THEORY
 Measuring of Risk and Return
 Portfolio Analysis
 Expected Values
 Sensitivity Analysis
8. VALUATION OF SECURITIES
 Key inputs to Valuation
 The Basic Valuation Model
 CAPM and its practical use

 The Arbitrage pricing model

 Valuation of bonds/debentures
 Valuation of preferred shares

 Valuation of equity shares

viii Teaching and Lectures, seminars, assignments and independent study

learning activities:
ix Assessment Test, Individual Assignment, Group Assignment and Final
Methods: examination.
x Reading list : Books:

 ACCA (Latest).Financial Management Exam Text; UK : BPP

Publishers.
 Arnold, Glen (2012).Corporate Financial Reporting, 5th
ed ,UK: Prentice Hall..
 Brealey, Myers and Allen (2013).Principles of Corporate
 Finance. 11th ed. USA: McGraw- Hill Irwin.
 Pandey, I, M (2011).Essentials of Financial Management, 3rd
ed,
 Pandey, I.M (2015). Financial Management. 11th ed. India:
Prentice Hall.
 Ross, S.A, et al, Irwin (2012). Corporate Finance. 10th
ed.Illinois.