Fundamentals of Financial Management

Module description

Summary:

Fundamentals of Financial Management aims to convey to students the core concepts of modern finance and equip them with the basic tools underlying contemporary financial management. The course provides a solid foundation in both areas of financial economics: asset pricing and corporate finance.  After introducing the notion of financial markets, the valuation of fixed-income securities and equities is covered.  The course covers portfolio theory and the derivation of the capital asset pricing model.  On the corporate finance side, capital budgeting techniques, the role of risk therein and the concept of the opportunity cost of capital are thoroughly analysed. Furthermore, models and evidence on capital structure decisions, choices over debt and equity financing, as well as dividend policy are examined and discussed.

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 Institute of Securities and Investment) and CFA (Chartered Financial Analyst 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, 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:BEAM047A
Module level:M
Academic year:2017/8
Module lecturers:
  • Dr Panagiotis Couzoff - 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 equities.  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. understand the concepts of risk and return in financial markets
  • 2. analyse and use models of portfolio diversification and asset pricing
  • 3. understand the principles of valuing fixed income securities and be able to assess their sensitivity to interest rate changes
  • 4. understand the concept of the cost of capital and be able to 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. understand the factors that determine a corporation's capital structure policy
  • 7. understand the choices behind a corporation's payout policy

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
331170

Details of learning activities and teaching methods

CategoryHours of study timeDescription
Scheduled teaching and learning activities22Lectures
Scheduled teaching and learning activities11Seminars

Formative assessment

Form of assessmentSize of the assessment (eg length / duration)ILOs assessedFeedback method
Seminar problems3 hrs of independent study / 1 hr in-class discussion1-13Suggested solutions

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
Mid-term written examination200.5 hours1-13Suggested solutions
Written examination801.5 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
Mid-term and final written examWritten exam (1.5 hours) 100%1-13August Examination Period

Syllabus plan

  • Introduction
  • Fixed income securities
  • Risk and return
  • Asset pricing
  • The cost of capital
  • Capital budgeting
  • Cash flow estimation and project risk analysis
  • Capital structure policy
  • Payout policy

Indicative learning resources - Basic reading

  • Berk, J. and P. DeMarzo, 2014. Corporate Finance, 3rd (global) edition, Harlow, Essex: Pearson Education Limited.

Module has an active ELE page?

Yes

Indicative learning resources - Web based and electronic resources

Given during lectures

Indicative learning resources - Other resources

Given during lectures

Origin date

19/09/2016

Last revision date

20/09/2017