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 Risk and Uncertainty
Use of probabilities. Atttitudes to risk and expected values. The expected value/standard deviation criterion. Risk analysis in practice.
2 Portfolio Theory and Capital Asset Pricing Model
Return and risk of combining investments. The Capital Asset Pricing Model.
3 Stock Market Efficiency
Tests of market efficiency. Time, seasonal and other market anomolies. Implications of the efficient market hypothesis.
4 Share price Valuation and the Cost of Capital
Dividends and share values. CAPM and share values. Valuation based on earnings and on cash flow. Valuation of a company. The cost of equity and debt capital. Overall cost of capital -weighted average cost approach.
5 Sources and cost of Funds
Issuing equity share capital and the rights of the owners of equity. Rights issues and bonus issues. Preferenec shares. Loan stocks and debentures. the cost of capital.
6 Capital structure and Dividend Policies
Traditional Modigliani & Miller views of capital structure. Capital structure and corporate and personal taxes. Financial Distress. Influences on dividend decisions. The value of dividend payments.
7 Capital Investment Decisions and Investment Appraisal
Specific investment decisions (lease or buy, asset replacement and capital rationing); allow for inflation and taxation in investment appraisal.
Statement on Teaching, Learning and Assessment
Teaching and Learning Work Loads
|Supervised Practical Activity||0|
|Unsupervised Practical Activity||0|
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.