Module Content

• Introduction to corporate objectives and their relationship with corporate strategy. The relationship between managers, shareholders and other stakeholders together with their impact on corporate objectives. Financial objectives in the context of not-for-profit organisations.   

• The economic environment for business and the nature and role of financial markets and institutions. 

• The nature of investment decisions and the investment appraisal process and methods.  

• The concept of risk; its computation and the recognition of unsystematic and systematic elements, the Markowitz model of optimum portfolios, portfolio theory, the inclusion of a risk-free investment and the Capital Asset Pricing Model. 

• Sources of and methods of raising short-term finance and long term finance, internal sources of finance and dividend policy, gearing and capital structure considerations.  

• Working capital management, including determining working capital needs and funding strategies. 

• Sources of finance and their relative costs, estimating; the cost of equity, the cost of debt and other capital instruments, the overall cost of capital. Capital structure theories and practical considerations, along with the impact of the cost of capital on investments. 

• Nature and purpose of the valuation of business and financial assets, models for the valuation of shares, the valuation of debt and other financial assets, the efficient market hypothesis and practical considerations of the valuation of shares. 

• The nature and types of risk and approaches to risk management, causes of exchange rate differences and interest rate fluctuations, hedging techniques for foreign currency risk.  

• Present financial data effectively using a range of appropriate tools 

Teaching Methods

The module is delivered by means of weekly lectures and seminars. Seminar questions usually deal with miniature case studies covering the subject matter of the previous lecture. In this way, students gain experience of the practical applications of the theory of corporate finance. Students are expected to prepare the case study prior to the seminar and to be prepared to participate in seminar discussions. 

This strategy is designed to give the students proficiency in the technical and computational aspects which are fundamental to competence in this subject. The coursework element comprises an extended study and report based on an individual company which is designed to enable each student to work independently, whilst incorporating consideration of events in the UK stock market between September and the following February.  These actions develop graduate attributes of planning and implementation, research skills, problem solving, awareness of events affecting financial markets, communication and reflection. 

During this module students will develop and enhance the graduate attributes of numeracy, problem-solving and planning. This will aid employability with the accounting profession and careers in general business management. 

Formative feedback on seminar and practice questions is provided to students on a weekly basis, with additional support available in the timetabled Technical Support Workshops. 

Assessment Methods

This module is assessed through a 25% and a 75% written examination.