Corporate Finance is an integrative subject combining many of the subjects studied in earlier years of the programme. It takes aspects of economic theory, statistical theory, law and accounting both financial and management. It gives the student an appreciation of how a company finances enterprise and also an understanding of the financial process in organisation.
The aim of this module is to help students understand the interface between a company and the financial markets and the influence of the latter on decisions about investment, financing and operational matters. The course also aims to give students a sound grounding in financial decision making
The module will concentrate on main themes as follows:
Introduction to Financial Strategy. The influence of the finance function on the strategic decision making process. Decisions concerning Investment. Decisions about Financing. The financial objectives of Business Organisations. The objectives of the organisation.
Capital Investment Appraisal. The time value of money. Use of cash flow discounting. The NPV and IRR. Approaches to capital expenditure evaluation. Discounting rates. Other approaches including payback. Dealing with implications of uncertainty, inflation and taxation. Capital Rationing. Effect of method of financing.
Cost of Capital. Cost of equity and debt capital. Weighted Average Cost of Capital. The effects of gearing. Capital Cost, Rights Issues, Portfolio Theory and the Valuation of Securities. Cost of capital and the Valuation of Businesses.
Working Capital Management. Forecasting the requirements for stock debtors and liquid funds. Policy decisions on credit given and taken. Factoring. Models for the control and management of inventories, and of liquid funds. Treasury function.
Sources of Finance
Long term debt finance. Bonds and bond valuations. Long term equity finance. Rights issues and stock market quotations. Equity versus debt finance. Role of the financial sector: banks and other financial institutions. Venture capitalists. Creditworthiness and corporate lending.
Dividend Policy
Corporate function of dividends. The role and rationale of dividend policy. Irrelevancy and Relevancy theory. Dividend policies. Conflicts with the dividend decision.
Corporate Governance
History of corporate governance. The combined code. The responsibilities of the Directors of an organisation. The Audit function. Corporate social responsibility. Shareholder activism.
Learning will be facilitated through a blended approach of conventional lectures, problem-based sessions and reflection on current practice in retailing.
| Module Content & Assessment | |
|---|---|
| Assessment Breakdown | % |
| Formal Examination | 70 |
| Other Assessment(s) | 30 |