Corporate Finance

Rationale and Purpose of the Module: This module provide students with a solid grounding in corporate finance, its application in share valuation within international capital markets and focuses on the decisions faced by corporate financial managers.

Syllabus: The course builds on students existing knowledge of discounted cash flow technique and covers more advanced capital budgeting, taking into account inflation, uncertainty and tax. Simulation and scenario analysis are covered and concept of a real option is introduced. The students are introduced to the international capital markets, and the main approaches to share valuation are discussed and contrasted. The importance of the assessment of risk and its impact on returns from financial assets are introduced, leading to an assessment of the cost of capital for a firm. The theory of the firm is explored in more detail, under the framework of agency theory. Dividend policy is studied, by reference to theory, taxation, the value of the firm and the wealth of shareholders. Capital structure is covered from a similar perspective. Mergers and acquisitions are evaluated. Ideas around the impact of corporate financial decisions on wider stakeholder groups and society more generally are discussed.