Finance is one of the most popular specializations within Master of Business Administration (MBA) programs. An MBA in Finance offers benefits to working professionals in a variety of industries, including commercial and corporate banking, investment services and real estate.
Given below is an outline of MBA Finance Syllabus
There are the modules that an MBA Finance student will be studying
MBA Finance Syllabus
@ Millennium School of Business Bangalore
3.3 Elective FM 1: Advanced Capital Budgeting
- Cash Flow Measurement: Dependence and independence of cash flows in evaluating projects, Measures of risk and returns, Inflation in capital budgeting, Real vs nominal discount rates, Bias in cash flow estimates, Total risk for multiple investment. Measuring cash flow for acquisition. Use of Excel for estimating cash flows & decision making.
- Ranking projects: NPV vs IRR Conflicts, Fisher’s rate of intersection, Multiple IRRs, MIRR, Optimal decision under capital rationing
- Real Options in Capital Investment: Types of options – expansion, Abandonment and postponement.
- Project Risk Analysis: Techniques for measuring stand alone risk – Sensitivity analysis, Scenario analysis and Simulation
5 Financing Decisions: Sources of long-term finances for a project. Leasing – Types of leases, structuring of lease rentals and evaluation of lease.
- Elective FM 2: Advanced Capital Structure Theories
- Empirical Perspectives on the Financial Characteristics: Analysis of composite cash flows, Leverage, Ownership structures, ROE, P/E ratios, Dividend payout, Dividend yields, and other financial characteristics of Sensex and Nifty firms.
- Principal Agent Conflict and Financial Strategies: Introduction, Limited liability and the separation of ownership and control, role of management with diffuse ownership. Classic directive to management, extended stakeholders, Conflicts of interest, Contracts and a revised directive.
- Information Asymmetry and the Markets for Corporate Securities: Introduction, Theories of the effects of information asymmetry, Valuation of traded equity under asymmetric information, Information asymmetry and the Quality of the market for a firm’s equity, optimal ownership structure.
- Leverage Decision: Introduction, Corporate and personal taxation, Modifying MM propositions to account for corporate taxes, Traditional trade-off theory, Agency theory and leverage decision, Asymmetric information and leverage, balancing agency costs with information asymmetry.
- The Firm’s Environment, Governance, strategy, operation and financial structure– Firm’s business environment, operation structure, Financial structure, risk performance and contingencies, empirical analyses of risk.
- Elective FM 3: Portfolio Management
- Market efficiency: Random walk and the efficient market hypothesis, Empirical testing of Efficient Market Hypothesis (EMH). Portfolio Theory – Capital allocation between the risky asset and the risk free asset, Optimal risky portfolios-Markowitz model Vs Stochastic Dominance Analysis(SDA), Equilibrium in capital markets – Capital asset pricing model, Index models and Arbitrage pricing theory and multifactor models of risk and return.
- Fixed Income Securities: Bond Prices and yield –Bond Characteristics and Types, Bond Pricing, Bond yield, Term Structure of Interest rate, Interest rate risk-interest rate sensitivity, duration, convexity and immunization.
- Fundamental Analysis: Economic analysis, Industry analysis, Company analysis, Forecasting company earnings, Valuation of companies,
- Technical Analysis: Market indicators, Forecasting individual stock performance, Techniques, Types of charts, Dow theory, Relative strength, Contrary opinion, Moving average, Conference index, Trading volume, Concept of depth, breadth and resilience of the market.
- Active Portfolio Management: Portfolio performance evaluation – measuring investment return, conventional theory of performance evaluation, M2 and T2, market timing, performance attribution procedures, style analysis and morning star’s, risk adjusted rating. Active portfolio construction using Treynor – Black model
4.2 Elective FM 4: Financial Strategies
- Mergers and Acquisitions: Basic forms of acquisitions, tax forms of acquisition, Accounting, Synergy from an acquisitions, and sources of synergy, calculating value of firm after acquisition, cost to stockholders from reduction in risk, the NPV of merger, defensive tactics. Takeover and Buyouts.
- Financial Distress and Restructuring: Introduction, Causes and effects of financial distress, Operational cutbacks, Causes and effects, Divestiture vs. asset sales, Financial restructuring, Reforming governance (or) Management structures (or) Replacing management Debt restructuring, Bankruptcy, liquidation & reorganization.
- Private Equity and Venture Capital: Introduction, Rudiments of valuing and financing a venture, Stages of venture development and financing, Financial analysis of Venture capital firms (VCCs), Structuring the deal/ Financial Instrument, Investment nurturing, valuation of VC portfolio, Initial Public offerings of stock –. Managing internal and seasoned equity offerings.
- Dividend policy and Stock Repurchases: The Irrelevance of Dividends and Stock Repurchases in Ideal Capital Market. Types of Dividends and Dividend Payment Process. Dividends and Principle Agent Conflicts. Dividends, Taxes and Transaction Costs. Stock Repurchases versus Dividends. Corporate Liabilities- Alternate Debt Financing Sources, Debt Maturity Decision, Corporate use of Trade Credit, Bank Loans and Relationship Lending. Information in Debt related Events.
- Merchant Banking and Credit Rating: Introduction to merchant banking, merchant bankers/lead managers, registration, obligation and responsibilities, underwriters, obligation, bankers to an issue, brokers to an issue. Issue management activities and procedure pricing of issue, issue of debt instruments, book building green shoe option, services of merchant banks, Credit Rating – SEBI guidelines, limitations of rating.
4.3 Elective FM 5: Derivatives
- Introduction to Derivatives: Forwards, Futures, Options, swaps, trading mechanisms, Exchanges, Clearing house (structure and operations, regulatory framework), Floor brokers, Initiating trade, Liquidating or Future position, Initial margins, Variation margins, Types and orders. future commission merchant.
- Forward and Future Contracts: Forward contracts, Futures contracts, Financial futures, Valuation of forward and future prices, Stock index futures, Valuation of stock index futures, Heading using futures contracts, Heading using stock index future contracts, Index futures, Adjusting BETA of a portfolio using stock.Interest rate futures and currency futures.
- Options Contracts and Trading Strategies: Characteristics of options contracts,trading strategies.
- Valuation of options – Graphic analysis of call and put values, Characteristics of option values, Models of valuation;Binomial and Black and Scholes model .Opton Greeks.
- Commodity future market: Forward market commission; exchanges, trading mechanism.
4.4 Elective FM 6: International Financial Management
- International Financial Management: Structure of foreign exchange market. The balance of payments, International monetary system – I.M.F, The nature of global capital flows – FDI, FII, Private equity and hedge funds.
- Exchange rate determination: Structural models of exchange rate determination – IRP and PP Parity, exchange rate forecasting. Transfer pricing and netting.
- The foreign exchange market: Structure, Types of transactions, quotations and Arbitrage. Exchange rate regimes – foreign exchange market in India.
- Measurement of exposure and Risk: Classification, Transaction, translation and operating exposures. Management of exposures. Hedging, forwards, currency futures, options, swaps and hedging with money market.
- Management of interest rate exposure: FRA interest rate caps and floors. Financial swaps-types-motivation application of swaps. GDR, ADR.
4.5 Elective FM 7: Corporate Taxation
- Outline of Income Tax Act, 1961: Basic Concepts and Definitions, Incidence of Tax, Heads of Income, Exemptions and deductions.
- Computation of Business Income: Definitions, Scope, Computation of Profits and Gains from Business or Profession, Deductions, Minimum Alternate Tax, Tax on Distributed Profits.
- Computation of Capital Gains: Capital Asset, Transfer, Short Term and Long Term Capital Gain, Cost Inflation Index, Exemptions.
- Set off and Carry Forward: Business Loss and Unabsorbed Depreciation, Return of Income, Assessment, Advance Payment of Tax, Tax Deduction or Collection at Source.
- Tax Implications in Business Restructuring