This module is structured as a readings based course where students will engage with the literature that underpins our knowledge of finance. The arguments presented in the literature will be analysed from the perspective of the practitioner with a focus on areas relevant to corporate finance. The aim of this module is to facilitate students in developing a solid understanding of the theoretical concepts underpinning the financial markets and the financial environment in which firms operate. In addition students should understand the importance of finance in company decision making and its place in the broader business mix. The module also aims to develop the self study skills of students with a view to preparing them to carry out critical reviews of literature in finance.
Analysis of Financial Performance
Appraising firm performance using traditional and modern methods including ratio analysis, and economic methods.
Market Efficiency
The Efficient Markets Hypothesis. The perspective of the investment, finance and dividend decisions and its role and relevance to investors in an investment advice setting.
Sources of Finance
Equity and Debt finance. Issuance, valuation, risk and return characteristics and the relative strengths and weaknesses of each as a source of finance. Particular focus on practical methods of valuing companies and evaluating bonds in terms of risk and default probabilities.
Capital Structure
Gearing, measurement and implications. Estimating the Cost of Capital. Business risk and financial risk. Capital structure and its place in financial strategy and decision making. Financial Distress.
Dividend Policy
The relationship between earnings and dividends. Dividends and capital structure, firm ownership and whether dividend decisions can affect the value of the firm.
Finance and Strategy
Examines the relationship between financial strategy and whether it can affect firm value.
Financial Distress
Options available, reconstructions, share re-purchases.
Mergers and Takeovers
The market for corporate control. Corporate diversification. The merger decision. Merger motives. Financing mergers.
Portfolio Theory
Attitudes towards risk. Measuring Risk. Combinations of investments. Portfolio expected returns and standard deviation. Capital Asset Pricing Model .Incorporates modern portfolio theory, asset pricing and CAPM.
Corporate Governance
The role of the finance manager in the decision making process. Corporate goals, the principal agent conflict and shareholder wealth maximisation.
Long-Term Financing
Types of equity and debt, obtaining a listing and issuing securities, security valuation, project finance.
Capital Structure
MM Irrelevancy Theory, theories of capital structure, empirical research findings
Dividend Policy
MM Irrelevancy Theory, theories of dividend policy, other distribution methods, empirical research findings.
Mergers and Takeovers
Types of mergers/takeovers, motives for mergers/takeovers, defensive tactics, paying for a takeover, evaluating a merger/takeover, regulation, post merger/takeover management.
Face to Face Lectures incorporating PowerPoint presentations, practical exercises, research articles and various media sources. This course is focused on corporate finance concepts, how they are applied in practice and research on same. Consequently the learning style will facilitate students in engaging with academic and practitioner journal based research.
| Module Content & Assessment | |
|---|---|
| Assessment Breakdown | % |
| Formal Examination | 70 |
| Other Assessment(s) | 30 |