Introduction to Finance

Module Lead: Kean Ow-Yong

This module introduces core concepts in finance. It is designed to give students sufficient discipline based knowledge to undertake more advanced finance modules. As such topics covered will include:

Time value of money; Financial market instruments and their functions; Discounted cash flow approaches to decision making; Evaluation of different sources of finance; Cost of capital and elementary financial management; Impact of dividend and capital structure policies.

Learning Outcomes

On completion of this module the student should be able to:

  • Explain the fundamental financial theories and goals of financial management;
  • Identify and apply the principles underlying the time value of money;
  • Explain the functions of financial markets and the main financial instruments found in them;
  • Evaluate investment decisions using discounted cash flow methods under the assumptions of certainty;
  • Apply traditional approaches to incorporate risk in investment decisions;
  • Show the different ways in which a company can raise capital and its valuation;
  • Calculate and make use of appropriate costs of capital for all equity financed and geared companies;
  • Explain how dividend and capital structure policies may affect a firm’s value.

Assessment

2 hour exam (75%), class test (25%).