Module

Fundamentals of Financial Management

Module description

Summary:

Fundamentals of Financial Management will take you through an appraisal of models and issues arising in the area of financial management. This module introduces you to finance theory and financial management. It covers techniques for capital budgeting, the role of risk in capital budgeting, and the cost of capital. It introduces the topic of financial markets, covering the notion of portfolio diversification leading to simple asset pricing models. It analyses models and evidence relating to a firm’s optimal capital structure and appropriate dividend policy.

Additional Information:

Internationalisation


Investment theory and corporate finance are international by nature and the principles taught can be applied in any country.

External Engagement


The module is linked with various professional bodies like CISI (Chartered Instituted of Securities and Investment) and CFAI (Chartered Financial Analysts Institute).


Employability


This module covers many different aspects of finance and prepares the students for employment in different financial sectors. Students acquire quantitative skills, analytical skills, experience using Excel, problem-solving, team-working, presentation, and communication skills.

Sustainability
The entire module is about the fair valuation of financial assets which is of interest to those involved in sustainability.
Access to sources of financial data and financial information, lectures and case study material is available for all students online.

Full module specification

Module title:Fundamentals of Financial Management
Module code:BEAM047
Module level:M
Academic year:2020/1
Module lecturers:
  • Dr Min Park - Convenor
Module credit:15
ECTS value:

7.5

Pre-requisites:

None

Co-requisites:

None

Duration of module: Duration (weeks) - term 1:

11

Module aims

The aim of the module is to introduce students to the subject of financial management. In particular the module provides students with a critical understanding of the basic concepts of risk and return in financial markets, and their implication for the financial decisions made by both investors and corporations, including portfolio construction, capital budgeting and the analysis of fixed income securities and derivatives. Through a combination of lectures and tutorial classes, students will be provided with a solid foundation in financial theory and practice, providing the necessary grounding for further modules in
finance.

ILO: Module-specific skills

  • 1. explain the concepts of risk and return in financial markets
  • 2. analyse and use models of portfolio diversification and asset pricing
  • 3. explain and demonstrate the principles of valuing common stocks and bonds
  • 4. explain the concept of the cost of capital and estimate the cost of capital for a corporation
  • 5. evaluate the attractiveness of real investment projects based on their expected cash flows and the cost of capital
  • 6. explain and discuss the factors that determine a corporation's capital structure policy
  • 7. explain and demonstrate the principles of pricing forwards, futures and options

ILO: Discipline-specific skills

  • 8. develop theoretical arguments based on analytical reasoning
  • 9. rigorously analyse problems in finance
  • 10. interpret financial data and problems in the light of established theories

ILO: Personal and key skills

  • 11. plan and manage their own study
  • 12. make appropriate use of learning resources
  • 13. critically analyse problems arising in both academic and practical contexts

Learning activities and teaching methods (given in hours of study time)

Scheduled Learning and Teaching ActivitiesGuided independent studyPlacement / study abroad
301200

Details of learning activities and teaching methods

CategoryHours of study timeDescription
Scheduled Learning & Teaching activities20Lectures
Scheduled Learning & Teaching activities10Seminars with assigned problem set
Guided Independent Study120Reading, preparation for classes and assessments

Formative assessment

Form of assessmentSize of the assessment (eg length / duration)ILOs assessedFeedback method
Problem Sets10 hours1-13Interpretation and discussion of correct answers during seminars

Summative assessment (% of credit)

CourseworkWritten examsPractical exams
01000

Details of summative assessment

Form of assessment% of creditSize of the assessment (eg length / duration)ILOs assessedFeedback method
In term test2040 minutes1-3Suggested solutions
Written examination802 hours1-13Suggested solutions

Details of re-assessment (where required by referral or deferral)

Original form of assessmentForm of re-assessmentILOs re-assessedTimescale for re-assessment
In term test (20%) and Written examination (80%)Written examination 2 hours (100%)1-13August Examination Period

Syllabus plan

  • Introduction
  • Time value of money
  • Valuing bonds and common stocks
  • Risk, return, and the cost of capital
  • Portfolio theory and asset pricing equilibrium
  • Market efficiency
  • Capital budgeting and the NPV rule
  • Capital structure irrelevance – M&M theorem
  • Capital Structure I
  • Capital Structure II

Indicative learning resources - Basic reading

Module has an active ELE page?

Yes

Indicative learning resources - Web based and electronic resources

Given before each lecture and seminar via ELE

Indicative learning resources - Other resources

Provided via ELE

Origin date

17/07/2014

Last revision date

10/09/2020