INTERNATIONAL Senate endorsement ref.

: 458th
ISLAMIC UNIVERSITY Senate endorsement date: 26th July 2019
MALAYSIA Version no: 2
Version effective date:

COURSE OUTLINE
1. Course Title: Fundamental Financial Management

2. Course Code: FINC 1302

3. Credit Value: 3

4. MQF Level: 6

5. Affected Batch: Semester 1, 2019/20 onwards

6. Centre of Studies: Kulliyyah of Economics and Management Sciences

7. Department/Unit: Department of Finance

8. Course Synopsis:
This course is mainly concerned with the introduction of the Finance as one of the major
functional areas in business. It covers the goals of financial management, time value of
money, the agency issues, risk and return trade-off, bonds & stock valuation, cost of capital
and capital budgeting. This course is designed to equip students with the basic investment
and financing decision tools.

9. Course Classification within the Curriculum: Core course

10. Prerequisite(s) (if any): NIL

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11. Course Learning Outcomes

Bloom’s Soft Programme

No. Outcomes Taxonomy skills Outcomes
C A P (KI) (PO)
1 Define appropriate basic principle of 1 1
theories and practice in financial
management.
2 Identify the differences between the 4 4 1 CT2 1
concept of Islamic and conventional
finance.
3 Apply the concepts of financial 3 1, 2
management in decision making.
4 Evaluate financial decision using 6 CT1 2, 6
financial tools.

12. LO - Instruction Method - Assessment Alignment:

Outcomes Teaching-Learning Methods Assessment Methods

LO1 Lectures Assignments, Tests and Final
Examination
LO2 Lectures Assignments, Tests and Final
Examination
LO3 Lectures and class exercises Assignments, Tests and Final
Examination
LO4 Problem-based learning Assignments, Tests and Final
Examination

13. Assessment Methods Weightage:

Methods Percentage
Assignments 30
Tests 20
Final examination 50
TOTAL 100

2
14. Student Learning Time:

1. Instruction Component Total Allocated Hours

1.1. Teacher-oriented methods
Lectures 28

1.2. Student-oriented methods

Tests & assignments 14
Total Instructor Contact Hours: 42
2. Independent Learning Component Total Estimated Hours
2.1. Reading and revision
Doing required reading and practice questions 42
2.2. Estimated hours for preparation toward assessments
Tests 5
Assignment 15
Final examination 13
3. Assessment Outside Instruction Hours Total Allocated Hours
Final examination 3

TOTAL SLT 120

15. Course Contents and Related SLT:

Face to Face Self-Learning

Week Topics
Hours Hours
Overview of Financial Management
1 § Role of Managerial Finance 3 3
§ Financial Market Environment
Financial Statements and Ratio Analysis
2 § Four Key Financial Statements 3 5
§ Financial Ratios
Time Value of Money- Part I
§ Role of TVOM
3 § Simple vs Compounding calculation 3 5
§ Future value vs Present value
§ FV & PV of a single sum
Time Value of Money-Part II
§ FV & PV of ord. annuity and annuity due
4 3 5
§ Uneven cash flows stream
§ Perpetuities
Time Value of Money- Part III
§ FV & PV of mixed CF streams
5 3 5
§ Non-annual compounding
§ Nominal; Periodic; Effective rates

3
 Application of TVOM
§ Personal and business decision making
5 § Loan Amortisation: Nominal vs Actual rates 3 5
§ Finding Growth rate and interest rate

Interest rates & Bonds

§ Interest rate vs required return
6 § Nominal vs Risk-free vs Real rates 3 5
§ Types of Bonds & its key features
§ Valuation Fundamentals
Bond Valuation
§ Basic Bond valuation
§ Bond prices vs interest rate
6 3 8
§ YTM; CY & CGY; YTC
§ Bonds returns and decision making
§ Zero coupon and Perpetual Bonds
Stock Valuation –Part I
§ Differences between Debts & Equity
§ Common stocks & Preferred stocks
7 3 5
§ Common stock valuation and EHM
§ Income approach: Zero, Constant; Variable
growth Models
Stock Valuation –Part II
§ Income approach: Free Cash Flow Model
§ Market & asset approaches to stock valuation
8 3 5
§ Common stock valuation and decision
making
§ Preferred stock valuation
Risk & Return Fundamentals
§ Risk & return defined
§ Risk preferences
§ Return & Risk of a single asset
9-11 § Portfolio defined 3 8
§ Correlation, diversification
§ Return & Risk of a portfolio
§ Systematic and Unsystematic risks
§ Capital Asset Pricing Model
Cost of Capital
§ Overview and Basic Concept
§ Costs of LT Debt, Preferred & Common
stocks
12 3 8
§ Cost of New Common stock and Retained
earnings
§ Weighted Average cost of Capital (WACC)
§ WACC and decision making

4
 Capital Budgeting Techniques
§ Overview of Capital Budgeting
§ Normal and Un normal Cash flow pattern
13-14 3 8
§ Mutually Exclusive vs independent projects
§ Payback, Profitability Index, Net Present
Value, Internal Rate of Return
Islamic Financial Management
§ Finance from Islamic Perspective
14 § Wealth Maximisation 3 3
§ Sukuk
§ Shariah Compliance Equities
42 78

16. References:

16.1. Required
Zutter, Chad J. and Smart, Scott B. (2022). Principles of Managerial Finance, Global
Edition, 16th Edition. Pearson Education Ltd.

16.2. Recommended
Ayub, Mohammad (2008), Understanding Islamic Finance, John Wiley & Sons.

Brigham, E.F., Houston, J.F, Yao-Min Chiang, Hon-Sing Lee & Bany Ariffin (2014).
Essentials of Financial Management 3rd Edition. Cengage Learning Asia.

Tilman Sheridan J., Keown Arthur J. & Martin John, D. (2018). Financial Management:
Principles and Applications, 13th Edition. Pearson Education.

Other reading materials:

Business periodicals/ magazines/ articles such as The Edge, The New Straits Times and
The STAR

Prepared by: Checked by: Approved by:

Signature: Signature: Signature:

Asrul bin Dahari
Department of Finance
Date: 04 March 2024
Dr. Roslily Ramlee Assoc. Prof. Dr. Gairuzazmi Mat
Head, Department of Finance Ghani
Date: Dean, Kulliyyah of Economics and
Management Sciences
Date:

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 ANNEX

I. Course Instructor Details

Semester: 2 Academic Year: 2023/2024

No. Name Email Department

1 Assoc. Prof. Dr. Nazrol Kamil nazrol@iium.edu.my Finance
Mustaffa Kamil
2 Dr. Fadhilah Abdullah Asuhaimi adhilahasuhaimi@iium.edu.my Finance
3 Bro. Asrul Dahari adahari@iium.edu.my Finance

II. Programme Learning Outcomes

At the end of the programme, students are expected to be able to:

No. Outcomes Outcome Domain

1 Demonstrate familiarity with established theories and practices Knowledge
in finance with a keen awareness of current developments.
2 Apply practical and analytical skills relevant to finance. Practical Skills

3 Exhibit socially responsible behavior for the progress of the Social Skills and
nation and ummah. Responsibilities
4 Demonstrate commitment to ethics, cooperation, Ethics,
professionalism and Islamic values. Professionalism and
Humanities
5 Communicate effectively, work in teams and display leadership Communication,
skills. Leadership, and
Team Skills
6 Adopt a scientific approach to problem solving and decision Scientific Methods,
making Critical Thinking and
Problem Solving
Skills
7 Apply information management skills and effective strategies Lifelong Learning
for lifelong self-improvement. and Information
Management
8 Incorporate financial perspectives in managing resource for Entrepreneurship and
effective decision making Managerial Skills