The fundamental goal of strategy is to maximise firm performance, as such finance is integral to strategic decision making. The module enables students to analyse financing and investment decision making centering on key concerns such as: How to finance long-term operations, how to appraise investments, mergers and acquisitions and how to return value to shareholders, thus helping students make value-creating financial decisions for themselves and their firms.
Long-term financing sources and considerations
• Types of equity financing, methods for valuing equity (basic), mechanics of equity issues and stock markets• Types of long-term debt financing, methods for valuing debt (basic), interest rates and yield curves• Choosing the appropriate long-term financing mix i.e. capital structure theories and strategy• Empirical evidence on long-term financing
Working Capital Management
• Cash conversion cycle and its financing implications• Managing stock, customers, suppliers and cash• Types of short-term financing and their relative merits• Empirical evidence on working capital management
Project Appraisal
• The nature of Capital investment and the requirement for advance analysis and project appraisal• Appraisal techniques: their application and the advantages and disadvantages of each.• Mergers and Takeovers• Types of M&T and the motives for M&T (with a financial focus)• Methods for financially appraising M&T (basic)• Methods for paying for takeovers and their relative merits• Tactics for defending against hostile takeovers• Methods for appraising M&T and their relative merits• Empirical evidence on M&T
Distributing Value to Shareholders
• Traditional theories of Dividend Policy• Methods for distributing value• Choosing the appropriate distribution strategy• Empirical evidence on distributions / dividend policy
Formal lectures will form the core of the learning strategy. To complement formal lectures, problem solving exercises will be undertaken to ensure experience of the technical aspects of the course and the use of tools (including spreadsheets) in a lab environment for more productive modelling. Self-learning via reading related academic papers will also be expected and used as a basis for class discussion.
| Module Content & Assessment | |
|---|---|
| Assessment Breakdown | % |
| Formal Examination | 60 |
| Other Assessment(s) | 40 |