- To provide an understanding of the major decision areas of corporate finance - how to raise funds and how to invest them.
- To examine both the theory and the practice of corporate financial decision-making.
- To examine the interaction between decision-making and capital market behaviour.
Knowledge and understanding of:
- the concept of the time value of money and its use to calculate the present and future values of a variety of cash flow patterns
- appraising an investment by calculating its payback period, profitability index, net present value and internal rate of return
- comparing the relative merits of the above investment appraisal methods
- valuing stocks and bonds
- the nature of financial risk
- the agency problem in modern companies
- the relationship between risk and return, both for individual stocks and for portfolios
- the capital asset pricing model and its application
- the meaning and implications of market efficiency
- measuring the cost of capital
- the significance of capital structure for company valuation
- the determinants of corporate dividend policy.
Coordinator: Dr Kevin Campbell