This module provides an introduction to business finance.
The aim of this module is to provide the student with knowledge of business finance along with an introduction to the financial environment, 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 a knowledge of the financial context in which businesses operate, and its impact on decision making.
2. Comprehend the key sources of finance and factors affecting the cost of capital.
1 Introduction to Financial Management
In these lectures, we will define finance and discuss its different subareas. After having an overall picture of the field of finance, we will discuss important variables in the business environment that can have a significant impact on the firm’s financial decisions.
2 Time Value of Money
In these lectures, we will study the time value of money (TVM). We will illustrate why money has a higher value today than in the future. We will also develop a set of tools that we will use throughout the rest of the module. We will start analysing single cash flows and then we will move onto annuity cash flows.
3 Understanding Financial Markets and Institutions
In these lectures, we will study the complex web of interdependent institutions and markets that are behind the transactions in the financial system. We will discuss the difference between primary and secondary markets and between money and capital markets. In addition, we will see the diverse types of institutions that form part of the financial system.
4 Bond Valuation
In these lectures, we will learn what bonds are, how to price them and why they are important to the firm.
5 Stock Valuation
In these lectures, we will learn what stocks are, how to price them and why they are important to the firm. In addition, we will look at the main stock markets in the world.
6 Risk and Return
In these lectures, we will introduce portfolio theory by learning how to characterise and estimate risk and return.
7 Calculating the Cost of Capital
In these lectures, we will introduce a very important concept in finance: the so called Weighted Average Cost of Capital (WACC). In simple words, WACC is the average cost per monetary unit of capital raised by the firm. We will learn how to calculate it and study why it is important.
8 Capital Budgeting
In these lectures, we will study net present value and other investment criteria and will analyse and discuss capital investment decisions.
Statement on Teaching, Learning and Assessment
Class contact will alternate between lecture and tutorial work, with lectures providing key input on concepts and contexts, and tutorial work involving students in individual and group activities and discussion. Assessments are designed to develop students analytical skills, give the opportunity for the application of tools and concepts, and address learning outcomes as specified.
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.