Second year module
This course will deal with a number of important topics in the area of corporate finance. Attention will be given to Investment, Financing and Dividend Decisions. Most of the topics will be covered in at an introductory/intermediate level. Some mathematical content is unavoidable but the emphasis is placed on understanding how the technical methods introduced can be applied to practical decision making and management. In turn, this requires an examination of the fundamental basis and assumptions of the techniques and an awareness of the resulting limitations. Attention is given to important topics in corporate finance and includes investment appraisal, financing and dividend policies. Topics are covered at an introductory/intermediate level. Emphasis is placed on understanding how technical methods can be applied to the practical context of management decisions recognising significant limitations.
By the end of the course students should be able to evaluate investment decisions using discounted cash flow techniques under the assumptions of certainty; apply traditional and portfolio approaches to incorporate risk in investment decisions; calculate and make use of the appropriate costs of capital for equity financed and geared companies including leased projects; demonstrate the impact of dividend and gearing policy on investment decisions; develop an understanding of the models and the underlying assumptions and their implications for financial decision making; apply traditional and portfolio appraches to incorporate risk in investment decision.
2 hr written examination 80%, classwork exercise 20%