Corporate Finance

Module description

The course provides a sound foundation to understanding key issues in corporate finance. The course 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 course will introduce student to aspects of investment decisions - choosing between various investment opportunities; 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. The course will also examine commonly used security valuation models to estimate the value of the firm.  Finally, the course will examine the notion of stakeholder value maximisation and the increasing importance of corporate governance and social responsibility in corporate decision making.

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 lectures.

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.

Ethics and Corporate Responsibility: The module examines how corporate governance and social responsibility issues impact business financing decisions in current corporate finance transactions.

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:MBAM945
Module level:M
Academic year:2017/8
Module lecturers:
  • Dr Rajesh Tharyan - Convenor
Module credit:10
ECTS value:

5

Pre-requisites:
Co-requisites:
Duration of module: Duration (weeks) - term 1:

4 days

Module aims

The general aim of this module is to develop a sound foundation to understanding  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. understand the objectives of the firm, main aspects of corporate financial decision making
  • 2. understand the concepts of risk and return and estimate basic measures of risk and return
  • 3. understand the concept of cost of capital and how to estimate this for a firm
  • 4. evaluate the attractiveness of investment projects based on expected cash flows and cost of capital
  • 5. understand the issues involved in choosing the optimal mix of various financing alternatives
  • 6. understand issues involved in choosing payout policies
  • 7. understand the principles of valuing securities, and the common models used in valuation and how to estimate the inputs to the models
  • 8. understand the stakeholder approach to value maximisation and notions of corporate social responsibility

ILO: Discipline-specific skills

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

ILO: Personal and key skills

  • 12. plan and manage independent study and research, and communicate effectively in writing
  • 13. make effective use of learning resources, databases, spreadsheets and associated tools
  • 14. critically analyse problems in academic and practical contexts
  • 15. 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
Mini case studies (group or individual)2 x 1 hour1-15Correct answers
Quizzes (group or individual)4 X 1 hour1-15Correct answers

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
Group Presentation 107 min presentation1-15Oral and written feedback
Corporate Challenge 401250 words.1-15Written feedback
Individual Assignment 501000 words.1-15Written feedback
0

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 words1-156 weeks from briefing

Syllabus plan

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

Topic 2 - Time value of money.

Topic 3 - Understanding risk and return.

Topic 4 - Cost of capital.

Topic 5 - Capital budgeting 

Topic 6 - Capital Structure.

Topic 7 - Dividend policy.

Topic 8 - Equity Valuation Models and issues.

Topic 9 - Rethinking firm objectives - shareholder vs stakeholder value maximisation, corporate governance and social responsibility issues.

Indicative learning resources - Basic reading

Essential Reading:

Brigham, E and Houston, J: Fundamentals of Financial Management, South Western Cengage Learning, 12th Edition (or later).

Alternative  Reading:

Brealey, Richard / Myers, Stewart / Allen, Franklin: Principles of Corporate Finance, newest edition, McGraw Hill.

Advanced Reading:

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

Module has an active ELE page?

Yes

Origin date

15/07/2017