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Unit information: Fundamentals of Corporate Finance in 2016/17

Please note: you are viewing unit and programme information for a past academic year. Please see the current academic year for up to date information.

Unit name Fundamentals of Corporate Finance
Unit code EFIMM0029
Credit points 15
Level of study M/7
Teaching block(s) Teaching Block 1 (weeks 1 - 12)
Unit director Dr. Xu
Open unit status Not open
Pre-requisites

None

Co-requisites

None

School/department School of Accounting and Finance
Faculty Faculty of Social Sciences and Law

Description

The unit introduces fundamental concepts in corporate finance. Topics covered include methods of investment project appraisal and factors shaping capital structure and dividend policies. The students are exposed to Modigliani-Miller irrelevance propositions and then study the impact of taxation and distress on financing choices.

Intended learning outcomes

Having successfully completed this unit students should be able to;

  • Describe, apply and evaluate the techniques that firms use in investment appraisal.
  • Derive and understand the core theories surrounding firms' capital structure policies.
  • Derive and understand the key theories of dividend policies.

Discuss and critically evaluate how those core theories hold up in practice.

Teaching details

25 contact hours split between lectures and classes (typically 18 hours lectures, 7 hours classes).

Assessment Details

The unit is assessed via a three-hour examination in January. The exam will require students to demonstrate their knowledge and understanding of contemporary issues in corporate finance. It will test student’s ability to interpret, critique and discuss academic literature and theories relevant to the issues raised. Students will be required to answer and analyse quantitative questions. In addition, the exam will test the students’ ability to think critically and communicate effectively in writing under exam conditions. Formative assessment will be undertaken through tutorials, where students will receive verbal and, occasionally, written feedback on their work. In addition to comments on their individual work, a 'model answer' will also be provided in order to inform students of what will be expected of them in the examination.

Reading and References

Hillier, D., Grinblatt, M., and Titman, S. (2012), Financial Markets and Corporate Strategy, Second European Edition, McGraw-Hill.

Brealey, R. A., Myers, S. C., & Allen, F. (2014). Principles of Corporate Finance. Eleventh Global Edition, McGraw-Hill/Irwin.

Berk, J. and DeMarzo, P. (2014). Corporate Finance. Third Global Edition, Pearson.

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