Corporate Finance

Module description

The module provides a foundation to understanding key issues in corporate finance. The module will first examine the nature of the modern corporation and the context of corporate financial decision making. Stating with basic concepts such as time value of money and understanding and measuring risk and return, the module will introduce student to aspects of investment decisions - choosing between various investment opportunities. The course will also very briefly cover financing decisions - choosing the optimal mix of financing methods and payout decisions -choosing to return funds back to shareholders and how these affect firm value. Techniques to estimate the cost of capital - an important determinant of firm value, will be introduced and the complexities involved in its calculation will be discussed.

Internationalisation:

Corporate finance theory and frameworks are internationally applicable. Different countries are however are approaching corporate responsibility issues at vastly different paces and through different means. Some of these aspects will be discussed during the lecture

Employability: 

Finance is a key element in many management decisions.  This module develops your skills and confidence to understand and evaluate the opinions, forecasts and financial decision making of company management and the views and opinions of analysts, particularly in relation to financial risk and returns and generating value to shareholders and other stakeholders

Research in Teaching:

Theoretical discussion will be complemented, where appropriate, with insights from theoretical and empirical research in finance/corporate finance.

Full module specification

Module title:Corporate Finance
Module code:MBAM952
Module level:M
Academic year:2018/9
Module lecturers:
  • Dr Rajesh Tharyan - Convenor
Module credit:10
ECTS value:

5

Pre-requisites:

None

Co-requisites:

None

Duration of module: Duration (weeks) - term 3:

4 days

Module aims

The general aim of this module is to develop a foundation to understanding the  key issues in corporate financial decision making. It provides a grounding in aspects of corporate finance theory and equips you with the necessary tools to evaluate the implications of corporate finance decisions for firm value.

ILO: Module-specific skills

  • 1. explain the objectives of the firm and the main aspects of corporate financial decision making.
  • 2. explain the concept of cost of capital and how to estimate this for a firm.
  • 3. evaluate the attractiveness of investment projects based on expected cash flows and cost of capital.
  • 4. evaluate the issues involved in choosing the optimal mix of various financing alternatives.
  • 5. evaluate the issues the issues involved in choosing payout policies.

ILO: Discipline-specific skills

  • 6. develop arguments based on analytical reasoning.
  • 7. rigorously analyse problems in corporate finance.
  • 8. interpret and analyse financial data and relate these to established theories.

ILO: Personal and key skills

  • 9. plan and manage independent study and research, and communicate effectively in writing.
  • 10. make effective use of learning resources, databases, spreadsheets and associated tools.
  • 11. critically analyse problems in academic and practical contexts
  • 12. plan and manage their own study both individually and within a group.

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

Scheduled Learning and Teaching ActivitiesGuided independent studyPlacement / study abroad
28720

Details of learning activities and teaching methods

CategoryHours of study timeDescription
Scheduled Learning and Teaching28Lectures & Facilitated Group Discussions
Guided Independent Study72Reading, Research, Writing

Formative assessment

Form of assessmentSize of the assessment (eg length / duration)ILOs assessedFeedback method
In class - mid-session test 15 multiple choice questions in 30 minutes based on first 2 day’s topics.1-3Correct answers
3 Take away quizzes True/False and numerical questions.1-12Correct answers and spreadsheets with calculations

Summative assessment (% of credit)

CourseworkWritten examsPractical exams
10000

Details of summative assessment

Form of assessment% of creditSize of the assessment (eg length / duration)ILOs assessedFeedback method
individual assignment 702500 words1-3, 7 -12Written feedback
group assignment301200 words2-3, 7 -12Written feedback

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

Original form of assessmentForm of re-assessmentILOs re-assessedTimescale for re-assessment
Individual Assignment (2500 words)Individual assignment 2500 words1-156 weeks from briefing
group assignment (1200 words)Individual assignment 2500 words1-156 weeks from briefing

Syllabus plan

Topic 1 -  The firm, its objectives and the decision making environment.

Topic 2 -  Cost of capital

Topic 3 -  Capital structure

Topic 4 -  Payout Policies

Topic 5 - Capital budgeting.

Indicative learning resources - Basic reading

Software: MS Excel or alternative.

Recommended textbooks:Textbook is not compulsory for this module.If you want to buy any, the recommended textbooks are.

First Option: Brigham, E and Houston, J.: Fundamentals of Financial Management, South Western Cengage Learning, 12th Edition (or later) referred to as (B&H).

Advanced Text: Aswath Damodaran: Applied Corporate Finance. (Editions 1-4).

Reading: All readings (urls below) are compulsory and required for in class discussion. In addition to these, there are links to relevant materials (shown in teal color) on the lecture slides, it is expected that you will read them prior to the lectures. 

An overview of Corporate Finance: (required for the first day of the course)

Corporate Finance in 30 minutes: a Guide for Directors and Shareholders, Mercer capital (2016):

https://tinyurl.com/ya5hzl9r

 

Topic 1 -The firm, its objectives and the decision making environment

Topic 2 - Cost of Capital

Topic 3 - Capital Budgeting

Topic 4 – Capital Structure

Topic 5 – Payout Policies

 

Textbook Chapters: The textbook is not compulsory, but the relevant chapters from B&H are indicated below.

The Firm and its Objectives: B&H Chapter 1 (Sections 1, 3, 4 and 8)

Cost of Capital: B&H Chapter 10

Capital Budgeting: B&H Chapter 11.

Capital Structure: B&H Chapter 14

Payout policy: B&H Chapter 15

Module has an active ELE page?

Yes

Origin date

13/07/18

Last revision date

02/11/2018