This module is not currently running in 2024 to 2025.
This module begins by looking at the role of investments and finance in an organisational context. It then considers the role of financial markets and the links between investors and businesses. Students will learn different investment appraisal techniques used in capital budgeting decisions, such as NPV and IRR. The module also covers the basics of any investment decision, such as the relation between return and risk. In the second part of the module, student will learn about short and long term sources (i.e. capital structure) of finance available to businesses and how to determine the cost and value of each source of long-term finance.
Topics covered include:
- Short-term and long term investment appraisal and capital budgeting techniques
- Estimation of return and risk in the context of portfolio theory
- Short-term finance and working capital management
- Long-term finance and the cost of each source of finance
- Capital structure and weighted average cost of capital
- Interaction of investment and financing decisions
The module will be taught by lectures, seminars and private study.
Total Contact Hours: 32
Private Study Hours: 118
Multiple Choice VLE test 1: 20%
Multiple Choice VLE test 2: 20%
2 hour end of year unseen examination: 60%
Arnold, G. (2013) Corporate Financial Management, 5th Ed. London: Pearson Education.
Brealey, A., Myers, S., and Allen, F. (2017) Principles of Corporate Finance, Global Edition, 12th Ed. NY: McGraw Hill Education.
Clayman, M.R., Fridson, M.S., Troughton, G.H., and Scanlan, M. (2012) Corporate Finance: A Practical Approach, 2nd Edition, CFA Institute Investment Series Set, Hoboken, NJ: Wiley.
Hillier, D., Ross, S., Westfield, R., Jaffe, J., and Jordan, B. (2013) Corporate Finance, 2nd European Edition, London: McGraw-Hill.
McLaney, E. (2014) Business Finance Theory and Practice, 10th Edition, Harlow: Pearson Education.
See the library reading list for this module (Medway)
The intended subject specific learning outcomes.
On successfully completing the module students will be able to:
Demonstrate knowledge and understanding of alternative capital budgeting techniques and the ability to evaluate investment projects using these techniques.
Demonstrate knowledge and understanding of the basics of risk and return in the context of investments and portfolio theory.
Demonstrate knowledge and understanding of various sources of short and long-term finance and the ability to determine the value of sources of long-term finance.
Demonstrate knowledge and understanding of basic theories of cost of capital and capital structure and the ability to estimate weighted average cost of capital for investment appraisal.
The intended generic learning outcomes.
On successfully completing the module students will be able to:
Research, plan, and work independently.
Effectively communicate information, arguments and analysis.
Apply quantitative and problem solving tools.
Retrieve information from a variety of sources.
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