Strategic Financial Management

Strategic Financial Management is taught in the final year of the first cycle of studies as a synthesis of knowledge in the field of corporate finance. The aim of the course is to integrate strategic management and financial theory through a combination of fundamental and advanced concepts in finance. The course develops an understanding of risk management, optimal capital structure, dividend policy, and the process of making long-term investment and financing decisions. Special emphasis is placed on models that link corporate strategy, the capital market, and firm value. Students are trained to apply logical and theoretical foundations in practical decision-making, to identify and analyse strategic financial problems, and to master techniques for their optimal resolution in real business environments.

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By completing this course, students develop advanced financial theoretical reasoning and the ability to creatively apply it in strategic financial decision-making. They acquire knowledge of the principles, processes, and solutions that shape corporate financial decisions and their long-term consequences. Students are expected to analyse strategic issues in modern finance, adopt contemporary financial terminology, and develop professional motivation for the field of finance. They gain competencies in understanding and applying risk–return models, including risk measurement, portfolio formation, cost of capital assessment, and investment project evaluation. Special focus is placed on understanding the behaviour of financial markets, capital market efficiency, market anomalies, and their implications for corporate strategy and firm value.

The financial system of the firm, its environment, and the role of strategic financial management; analysis of the business environment and factors influencing financial decision-making. The price and time value of money; computation of future and present value; the dynamics of discounting and compounding. Risk and return; measurement of risk for individual assets and portfolios; the risk–return trade-off and its implications for investment decisions. Cost of capital models: CAPM, APT, and multifactor models; dividend discount models; the build-up model; risk premia and their determinants. Financial markets and their efficiency; market structure and types of markets; arbitrage, speculation, and signalling; capital market efficiency hypotheses, market anomalies, and implications for investors and corporate managers. Investment decision-making and the evaluation of investment projects (static and dynamic methods); scenario, sensitivity, and project risk analysis; international investment decisions. Financing decisions; sources of finance and capital markets; capital structure theories; optimal capital structure and the financial strength of the firm. Dividend decision-making.

The forms of teaching include lectures, exercises, independent seminar papers, regular and online consultations, discussions of real-world cases, case studies, and interactive assignments carried out by students. Lectures and exercises are based on two-way communication aimed at presenting course content through practical examples, illustrations, and applied tasks. The preparation of seminar and assignment papers is conducted under the supervision of the professor, with consistent application of the methodology appropriate for undergraduate study.

Colloquium I (0-20 points); Colloquium II (0-20 points); Final exam (0-50 points); Attendance (2point); Class activities (seminar papers, discussions, case studies) (0-8 points)

Required Literature:
Mikerević, D. (2010). Advanced Strategic Financial Management. Banja Luka: Faculty of Economics and Finrar.

Recommended Literature: Brealey, R. A., Myers, S. C., & Marcus, A. J. (2022). Fundamentals of Corporate Finance. McGraw Hill
Ross, S. A., Westerfield, R. W., & Jordan, B. D. (2022). Fundamentals of Corporate Finance. McGraw-Hill
Pike, R., Neale, B., Akbar, S., & Linsley, P. (2018). Corporate Finance and Investment. Decisions & Strategies. Pearson Education
Higgins, R. C., Koski, J. L., & Mitton, T. (2022 ). Analysis for Financial Management. McGraw Hill

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