Corporate Finance

Objectives

  • 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.

Learning outcomes

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.

Division: AAF

Coordinator: Dr Kevin Campbell

© University of Stirling FK9 4LA Scotland UK • Telephone +44 1786 473171 • Scottish Charity No SC011159
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