Paper 2: Strategic Financial Management<\/p>\n
(One paper \u2013 Three hours \u2013 100 marks)<\/p>\n
Level of Knowledge: Advanced knowledge<\/p>\n
Objective:<\/p>\n
To apply financial management theories and techniques for strategic decision making.<\/p>\n
Contents:<\/p>\n
1. Financial Policy and Corporate Strategy<\/p>\n
Strategic decision making framework<\/p>\n
Interface of Financial Policy and strategic management<\/p>\n
Balancing financial goals vis-\u00e0-vis sustainable growth.<\/p>\n
2. Project Planning and Capital Budgeting<\/p>\n
Feasibility study<\/p>\n
Cash flow Projections \u2013 Impact of taxation, depreciation, inflation and working capital<\/p>\n
Capital Budgeting Decisions – Certainty Equivalent approach, Evaluation of Risky<\/p>\n
Investment Proposals, Risk and Return analysis, Simulation and decision tree analysis, Sensitivity analysis, Capital Rationing, Adjusted Net Present Value, Replacement decisions, Application of Real Options in capital budgeting, Impact of inflation on capital budgeting decisions Preparation of Project Report
\nSocial cost benefit analysis.
\n3. Leasing decision including cross border leasing<\/p>\n
4. Dividend Decisions
\nDividend theories, Determinants of dividend policies.<\/p>\n
5.<\/p>\n
(a) Indian Capital Market including role of various primary and secondary market institutions
\n(b) Capital Market Instruments<\/p>\n
Financial derivatives \u2013 stock futures, stock options, index futures, index options<\/p>\n
Option valuation techniques : Binomial model, Black Scholes Option Pricing Model, Greeks
\n\u2013 Delta, Gamma, Theta, Rho and Vega<\/p>\n
Pricing of Futures \u2013 Cost of carry model<\/p>\n
Imbedded derivatives<\/p>\n
5 (c) Commodity derivatives
\n(d) OTC derivatives -Swaps, Swaptions, Forward Rate Agreements (FRAs), Caps, Floors and Collors.<\/p>\n
6. Security Analysis
\nFundamental analysis – Economic analysis, Industry analysis and Company Analysis
\nBond valuation, Price Yield relationship, Bond Price forecasting \u2013 application of duration and convexity, Yield curve strategies Technical Analysis \u2013 market cycle model and basic trend identification, different types of charting, support and resistance, price patterns, moving averages, Bollinger Bands,
\nmomentum analysis.<\/p>\n
7. Portfolio Theory and Asset Pricing<\/p>\n
Efficient Market Theory \u2013 Random walk theory ; Markowitz model of risk return optimization<\/p>\n
Capital Asset Pricing Model (CAPM)<\/p>\n
Arbitrage Pricing Theory (APT)<\/p>\n
Sharpe Index Model<\/p>\n
Portfolio Management – Formulation, Monitoring and Evaluation<\/p>\n
Equity Style Management<\/p>\n
Principles and Management of Hedge Funds<\/p>\n
International Portfolio Management.<\/p>\n
8. Financial Services in India<\/p>\n
Investment Banking<\/p>\n
Retail Banking<\/p>\n
On Line Share Trading<\/p>\n
Depository Service.<\/p>\n
9.<\/p>\n
(a) Mutual Funds: Regulatory framework, formulation, monitoring and evaluation of various schemes of Mutual funds, Money market mutual funds.<\/p>\n
(b) Exchange Traded Funds.<\/p>\n
10. Money Market operations<\/p>\n
11. (a) Foreign Direct Investment, Foreign Institutional Investment.<\/p>\n
(b) International Financial Management<\/p>\n
Raising of capital abroad – American Depository Receipts, Global Depository Receipts,<\/p>\n
External Commercial Borrowings and Foreign Currency Convertible Bonds<\/p>\n
6
\nInternational Capital Budgeting
\nInternational Working Capital Management.<\/p>\n
12. Foreign Exchange Exposure and Risk Management<\/p>\n
Exchange rate determination, Exchange rate forecasting<\/p>\n
Foreign currency market<\/p>\n
Foreign exchange derivatives \u2013 Forward, futures, options and swaps<\/p>\n
Management of transaction, translation and economic exposures<\/p>\n
Hedging currency risk.<\/p>\n
13. Mergers, Acquisitions and Restructuring<\/p>\n
Meaning of mergers and acquisition, categories, purposes<\/p>\n
Process of mergers and acquisition \u2013 Identification and valuation of the target, acquisition through negotiation, due diligence, post \u2013 merger integration<\/p>\n
Legal and regulatory requirements
\nMerger and Acquisition agreement<\/p>\n
Reverse merger<\/p>\n
Potential adverse competitive effects of mergers<\/p>\n
Corporate Takeovers: Motivations, Co-insurance effect, Cross-border takeovers, Forms of takeovers, Takeover defenses<\/p>\n
Going Private and Other Control Transactions: Leveraged Buyouts (LBOs), Management Buyouts (MBOs), Spin Offs and Asset Divestitures Corporate Restructuring : Refinancing and rescue financing, reorganizations of debtors and creditors, Sale of assets, targeted stock offerings, downsizing and layoff programmes, negotiated wage give-backs, employee buyouts.<\/p>\n","protected":false},"excerpt":{"rendered":"
Strategic Financial Management ICAI Syllabus Paper 2: Strategic Financial Management (One paper \u2013 Three hours \u2013 100 marks) Level of Knowledge: Advanced knowledge Objective: To apply financial management theories and techniques for strategic decision making. Contents: 1. Financial Policy and Corporate Strategy Strategic decision making framework Interface of Financial Policy and strategic management Balancing financial … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":""},"categories":[4731],"tags":[],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/posts\/21743"}],"collection":[{"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/comments?post=21743"}],"version-history":[{"count":0,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/posts\/21743\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/media?parent=21743"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/categories?post=21743"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/tags?post=21743"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}