An introductory module on corporate finance.
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.
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.
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
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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.
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.