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Unit information: Corporate Finance in 2018/19

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Unit name Corporate Finance
Unit code EFIMM0017
Credit points 15
Level of study M/7
Teaching block(s) Teaching Block 2 (weeks 13 - 24)
Unit director Dr. Kim
Open unit status Not open
Pre-requisites

Finance and Accounting (ECONM1007)

Co-requisites

None

School/department School of Economics, Finance and Management
Faculty Faculty of Social Sciences and Law

Description

This unit aims to provide students with a well-rounded picture of firms’ investment decisions and financing decisions. Building on the basic tools introduced in Finance and Accounting (ECONM1007), the unit explores various topics in corporate finance. They include capital budgeting problems, the effect of capital market imperfections on the firms’ investment and financing decisions, the use of real options in project evaluation, mergers and acquisitions, and security offerings. The unit will be delivered via a mix of lectures, tutorials, and exercise lectures, as well as case studies and additional readings where appropriate.

Intended learning outcomes

On successful completion of the unit, students should be able to

(ILO-1) discuss main questions of corporate finance, understand underlying economic theories, and apply numerical techniques to analyse problems.

(ILO-2) understand the key aspects of project evaluation and have a good command of valuation methods including real-option approach.

(ILO-3) understand market imperfections and their implications for firms’ investment and financing decisions drawing on appropriate theoretical frameworks and empirical evidence.

(ILO-4) discuss important issues and institutional details surrounding corporate activities, such as mergers and acquisitions and security offerings, and analyse related problems.

Teaching details

25 contact hours split between lectures, exercise lectures, tutorials, and clinics (typically 16 hours lectures, 9 hours split between exercise lectures and tutorials and clinics).

Assessment Details

The unit is assessed via a three-hour closed book exam in May/June (100%). The exam will contain a mix of essay and numerical questions (ILOs 1-4). Numerical questions will assess students’ ability to analyse core finance problems, and essay-type questions will assess students’ understanding of underlying theories and institutional knowledge. During the term, problem sets (typically 4-5 sets) will be circulated, with which students will have opportunity to gain problem-solving skills and to discuss theoretical concepts learnt (ILOs 1-4). In addition, students will work in groups on business cases and prepare their case analysis reports during the term. In this formative assignment, students will demonstrate their ability to identify the relevant issues, apply the concepts and frameworks learnt, and report/present their analysis (mainly ILOs 2 and 4).

Reading and References

Hillier, Grinblatt, and Titman, "Financial Markets and Corporate Strategy", McGraw-Hill Higher Education, 2012, 2nd edition, European edition.

Berk and DeMarzo, "Corporate Finance", Pearson/Prentice-Hall, Pearson Education Limited, 2014, 3rd edition, Global edition.

Ross, Westerfield, and Jaffe, "Corporate Finance", McGraw-Hill, 2010, 9th edition.

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