CORPORATE FINANCE AND FINANCIAL STRATEGIES

SHE Level 4
SCQF Credit Points 20.00
ECTS Credit Points 10.00
Module Code M3N325532
Module Leader n/a
School Glasgow School for Business and Society
Subject Finance and Accounting
Trimesters
  • A (September start)
  • B (January start)
  • C (May start)

Pre-Requisite Knowledge

Fundamentals of Corporate Finance or equivalent.

Summary of Content

Rationale The rationale for this module is to build on the concepts explored in Fundamentals of corporate finance by further development of major investment and financial decisions faced by corporate financial managers. These decisions will impact upon any professional within the corporate environment and thus an understanding of the main issues is important in future professional environments. Summary of content The module will consider issues such as the valuation of bonds and shares, estimating an appropriate discount rate for investment appraisal, risk return trade off and application of option pricing theory.

Syllabus

Financial statement analysis and long term planning Bond Valuation Equity Valuation Critically Appraise valuation techniques Derivatives : Options Futures Forwards Introduction to risk return and opportunity cost of capital Markowitz portfolio theory Capital budgeting and Risk Mutual funds Hedge funds Long term financial planning Short term finance International diversification

Learning Outcomes

On successful completion of this module, the student should be able to:1. Understand the objectives of the firm.2. Calculate the value of bonds and shares.3. Be able to critically appraise valuation techniques.4. Explain the relationship between the risk and return of financial instruments.5. Critically evaluate the theoretical and practical issues involved in corporate financial structure and dividend policy decisions.6. Critically understand risk return trade off.7. Understand option pricing.8. Explain the functions of financial intermediaries like mutual funds and hedge funds.

Teaching / Learning Strategy

The module provides a combination of lectures, seminars, practical and project based student activity. Each week will be devoted to learning a topic in increasing depth. Students may also be asked to present their views to class for general discussion. Where appropriate, web-based material will be used to complement the lectures. Students are expected to keep up to date with the relevant reading and to attempt seminar questions prior to the seminar, where they will be asked to participate and present solutions. Feedback Strategy Students will be provided with feedback on all forms of assessed work within three weeks of submission. They will also receive feedback on all group or individual contributions to the module. The following strategies will be adopted: A: Facilitating the development of self-assessment Students will be asked to identify strengths and weaknesses in their own work in relation to the criteria set out in the marking template before handing the work in for marking. B: Encouraging teacher and peer dialogue The lecturer will review feedback at the tutorials where coursework and other work done by students will be handed back. GCU Learn discussion boards are set up to encourage peer-to-peer dialogue. C: Clarifying good performance A marking template is available for all student course work. This is handed out in advance and discussed with students in a tutorial prior to completion of the assignment. Anonymous examples of good and poor exam work from previous cohorts of students will be handed out, together with markers' comments. D: Providing opportunities to close the gap between current and desired performance In providing feedback, the lecturer will provide action points for students to follow to enable them to improve their performance. At feedback sessions in tutorials students will be asked to identify their own action points, based on the feedback they have just received to involve students more in the generation and planned use of feedback. E: Delivering high quality information about their learning Formative feedback will be provided via online testing and informal tutorial discussions on pre-prepared work. Feedback will be provided within three weeks of summative coursework submission and will provide information on strengths, weaknesses and suggestions for corrective action. Students may also discuss any points with their lecturer or tutor. F: Encouraging positive motivational beliefs and self esteem Feedback give to students will aim to be positive and constructive, with action points for improvement. Formative assessment will be used that will give opportunities for students to receive individual feedback designed to encourage positive motivational belief and self-esteem. G: Providing information to teachers that can be used to shape the teaching. Students will be asked to identify where they are having difficulty in assignments and in the course generally through the medium of the staff-student consultative group and the GCU Learn site. Discussion boards are set up to discuss and provide feedback on both coursework and also to help in exam preparation. GSBS will continue to use the advancement of GCU Learn as a blended learning tool through its teaching and learning as well as through engagement with students. GSBS will ensure that all modules are GCU Learn enabled and with the support of the Learning Technologists at the cutting edge of development of online materials. Academic staff and the Learning Technologists will continue to work together to develop and operate all modules on GCU Learn to ensure student support and information sharing. Students are provided with formative and summative feedback via a variety of mechanisms. Feedback on coursework is provided within 3 working weeks of submission.

Indicative Reading

-567 Books and articles: In addition to the main text, other texts, financial articles and web sites will be utilized on this module: Main texts: Brealey R A, Myers S C and Marcus A J, Fundamentals of Corporate Finance, (Latest Edition), McGraw-Hill. Other texts: Webb R and Brahma S; Financial markets and institutions, (2013) Pearson. Pike R and Neale B, Corporate Finance and Investment, Decisions and Strategies, (Latest Edition), Prentice Hall Megginson, W, Smart, S, and Lucy, B. Introduction to Corporate Finance, (Latest Edition), South-Western Arnold G, Corporate Financial Management, (Latest Edition), FT Prentice Hall McLaney E, Business Finance, Theory and Practice, (Latest Edition), FT Prentice Hall. Brealey R A, Myers S C, and Allen A, Principles of Corporate Finance, (Latest Edition), McGraw-Hill. Financial sections of newspapers such as The Financial Times, and periodicals like the Economist, and the Investors Chronicle will be identified for reading on background issues and current developments. Company annual accounts and their web sites will be identified for information.

Transferrable Skills

By the end of this module students will have gained competence in the following key Knowledge specific skills An ability to interpret financial data including that arising in the context of the firm or household from accounting statements and data generated in financial markets. The interpretation may involve analysis using statistical and financial functions and procedures such as are routinely available in spreadsheets (eg Microsoft Excel) and statistical packages An understanding of financial service activity in the economy, and an appreciation of how finance theory and evidence can be employed to interpret these services . An ability to understand financial statements, and a basic appreciation of the limitations of financial reporting practices and procedures Cognative and generic skills a capacity for the critical evaluation of arguments and evidence ability to locate, extract and analyse data from multiple sources, including the acknowledgement and referencing of sources numeracy skills, including the ability to manipulate financial and other numerical data and to appreciate statistical concepts at an appropriate level skills in the use of communication and information technology in acquiring, analysing and communicating communication skills including the ability to present quantitative and qualitative information together with analysis, argument and commentary in a form appropriate to different intended audiences capacities for independent and self-managed learning experience of working in groups, and other interpersonal skills, and in presenting the work orally as well as in written form.

Module Structure

Activity Total Hours
Lectures (FT) 24.00
Independent Learning (FT) 146.00
Seminars (FT) 12.00
Assessment (FT) 18.00

Assessment Methods

Component Duration Weighting Threshold Description
Course Work 01 n/a 40.00 35% Active Portfolio Management 2000 words
Exam (Exams Office) 2.00 60.00 35% Unseen exam