The aims of this module are:

To develop in students the Knowledge and Competence to make Effective and Relevant Decisions in the Financial Management area.

To cultivate in students the ability to Assess and Critically Evaluate the Principle Concepts and Techniques used in Financial Management.

The knowledge, understanding and cognitive, practical and transferable skills which a student is expected to be able to demonstrate after studying this module is expressed in the following learning outcomes. These are grouped under appropriate syllabus headings.

Corporate Finance (40 Hours / Three Weeks)

By the end of this Syllabus Topic the student will be able to:

Understand the Objective and Scope of Corporate Finance within the context of the Business Environment

Evaluate the problems of Corporate Governance arising from Agency problems and how these problems affect Financing/Capital Structure decisions

Assess Capital Market and Portfolio Theories including

Efficient Market Hypotheses and their applicability to the Business Organisation

Distinguish between and Assess the importance of Short-term, Medium-term and Long-Term Debt Financing.

Understand Equity and Quasi-Equity Capital

Understand Opportunity Cost of Capital

Explain Weighted Average Cost of Capital and the Marginal Cost of Capital.

Apply the Capital Asset Pricing Model (CAPM)

By the end of this Syllabus Topic the student will be able to:

Understand the Capital budgeting process

Understand Cash Flow Analysis and the Time Value of Money

Apply Capital budgeting Techniques – NPV, IRR, Payback, ARR and Profitability Index, for decision-making.

Apply Capital Budgeting decisions under Uncertainty using Risk Analysis
 

Techniques -

Risk Adjusted NPV model

Risk Adjusted discount rate

Sensitivity Analysis

By the end of this Syllabus Topic the student will be able to:

Explain Financial Leverage and Financial risk

Understand Capital Structure Theories – traditional approaches and the

Modigliani-Miller Theorem

Explain the impact of Market Imperfections, Taxes and the Agency problem

Explain Optimal Capital Structure

Explain the types of Dividend Policies and the factors affecting these

Understand Dividend decisions and the Modigliani-Miller Irrelevance Argument.

By the end of this Syllabus Topic the student will be able to:

Appreciate the purpose of:

Corporate Liquidity

Cash Management

Critically Evaluate how

Management of Cash

Management of a Marketable Securities Portfolio can optimize business performance

By the end of this Syllabus Topic the student will be able to:

Understand the Foreign Exchange Market with respect to Forwards, Futures, Options and their effect on

Foreign Currencies.

Understand International Monetary Parity relations.

Understand the management of Transaction Exposure and Translation Exposure.

Assessment

Achievement of these Learning Outcomes will be reflected in student responses to a 
THREE HOUR OPEN BOOK Examination.

Examination Structure

Five Compulsory Questions

Indicative Reading
Current Editions of the following Textbooks are recommended.
 
Textbooks:

Journals:

Financial Accountant
www.bized.co.ac.uk
Journal of Finance