Corporate Finance

Description

An introductory module on corporate finance.

Aims

The aim of this module is to provide the student with: knowledge of the main sources of corporate finance and the ability to apply key techniques for using and managing financing in large and small organisations.

Learning Outcomes

By the end of this module the student should be able to:

1.  demonstrate an understanding of some of the key theoretical concepts in corporate finance. in corporate finance;

2.  analyse the impact of risk on various business and financial decisions.

Indicative Content

1 Time Value of Money

Future Value and Present Value; Annuities and Perpetuities; Quotes rates, Effective Annual Rate and Annual Percentage Rate.

2 Bond Valuation

Bond Pricing; Bond Ratings; Interest Rate Risk; Determination of Bond Yields.

3 Equity Valuation

Ordinary and Preference Shares; Cash Flow Valuation;

4 Capital Budgeting

Net Present Value, Payback Rule and Other Investment Criteria; Proforma Financial Statements; Special Cases of Discounted Cash Flow; Scenario Analysis; Sensitivity Analysis; Break-Even Analysis

5 Risk and Return

Expected Returns and Variances; Systemic and Unsystematic Risk; Diversification and Portfolio Risk; Systemic Risk and Beta; the Security Market Line and CAPM.

6 Cost of Capital

The Cost of Equity; the Cost of Debt and Preference Shares; the Weighted Average Cost of Capital.

7 Financial Leverage and Capital Structure Policy

The effect of Financial Leverage; Capital Structure and the Cost of Equity; Modigliani & Miller Propositions and the value of the firm; Optimal Capital Structure; the Pecking-Order Theory.

8 Dividends and Pay-out Policy

Cash Dividends and Dividend Payments; Does Dividend Policy Matter? Low vs. High-Dividend Payout; Shares Repurchases.

9 Short-Term Financial Planning and Management

Reasons for holding Cash; Understanding Float; Investing Idle Cash; Determining the Target Cash Balance; Optimal Credit Policy; Inventory Management.

Statement on Teaching, Learning and Assessment

Teaching and Learning Work Loads

Total 200
Lecture 28
Tutorial/Seminar 10
Supervised Practical Activity 0
Unsupervised Practical Activity 0
Assessment 50
Independent 112



Guidance notes

Credit Value – The total value of SCQF credits for the module. 20 credits are the equivalent of 10 ECTS credits. A full-time student should normally register for 60 SCQF credits per semester.


Disclaimer

We make every effort to ensure that the information on our website is accurate but it is possible that some changes may occur prior to the academic year of entry. The modules listed in this catalogue are offered subject to availability during academic year 2019/10 , and may be subject to change for future years.