CAPITAL BUDGETING AND FINANCING DECISIONS
SYLLABUS
UNIT I
Nature of Long term financial decisions - Sources of long term finance - public issue -
institutional finance - innovative modes of financing.
UNIT II
Estimation of cash flows - evaluation techniques - Project evaluation under risk and
uncertainty - sensitivity analysis - certainty equivalent - Decision tree approach Risk
adjusted discount rate approach - Analysis of non-financial aspects.
UNIT III
Capital Structure decisions - Cost of capital and capital structure determination optimum
capital structure.
UNIT IV
Leverage - Types -operating and financial leverage - combined leverages
UNIT V
Financial forecasting - determination of the ratio between debt and equity.