Corporate Finance

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ANF301
Code
Term 1
Term
20
Credits
09
SCQF Level
2023/4
Year
Business, Law and Social Sciences
School

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. 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. in corporate finance;
  2. Analyse the impact of risk on various business and financial decisions. decisions.

Indicative Content

1 The role of the finance function

The role of finance function in organisations and finance professionals, and its evolution; the role finance in cross-functional operations within an organisation

2 Time Value of Money

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

3 Bond Valuation

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

4 Equity Valuation

Ordinary and Preference Shares; Cash Flow Valuation;

5 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

6 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.

7 Cost of Capital

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

8 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.

9 Dividends and Pay-out Policy

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

10 Short-Term Financial Planning and Management

Sources of short-term finance; Calculation of cash cycles; Reasons for holding Cash; Understanding Float; Investing Idle Cash; Determining the Target Cash Balance; Optimal Credit Policy; Inventory Management.

Teaching and Learning MethodHours
Lecture24
Tutorial/Seminar12
Supervised Practical Activity0
Unsupervised Practical Activity0
Assessment50
Independent114

Guidance Notes

SCQF Level - The Scottish Credit and Qualifications Framework provides an indication of the complexity of award qualifications and associated learning and operates on an ascending numeric scale from Levels 1-12 with SCQF Level 10 equating to a Scottish undergraduate Honours degree.

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 2023/4, and may be subject to change for future years.