Financial Management I Pdf notes – BAF 2104 MKU

MKU Financial Management 1

COURSE CONTENT

1.0 Introduction.

  • Nature and scope of financial management
  • Role and functions of a finance manager
  • Objectives of a firm; profit maximization; wealth maximization, social responsibility

2.0 Sources of company finance

  • Short term sources of fund; short term leases, bank overdraft
  • Long term sources of funds; ordinary share capital, preference shares, debentures, long leases hire purchase

3.0 Financial markets and financial intermediaries

  • Stock markets; primary and secondary markets; Other types of financial markets;
  • Terminologies used on the stock market; Central Depository systems (CDS);
  • New developments in financial markets

4.0 Financial statement analysis and financial forecasting

5.0 Capital Budgeting

  • Time Value of Money; Compounding and discounting of cash flows
  • Capital investments; types of capital investments projects
  • Methods of capital investment appraisals
  • Non-Discounted Cash Flow Methods: payback period, accounting rate of return
  • Discounted Cash Flow Methods: Net present value, Internal rate of return, profitability index

6.0 Cost of Capital

  • Importance of cost of capital
  • Weighted average cost of capital (WACC); Specific cost of debt, equity, preference shares
  • Marginal cost of capital

MOUNT KENYA UNIVERSITY

MKU Financial Management 1

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