The main aim of this module is to provide a rigorous grounding in the theory and practice of corporate finance at an advanced level, and a thorough synthesis of the most important current research in corporate finance, with an emphasis on the applications of the principles to long-term strategic decision making. Both normative and positive aspects of the theory are examined, together with supporting descriptive and empirical evidence.

By the end of the module you should have:

·  Advanced knowledge and critical understanding of essential components of modern corporate finance and associated current research.

·  Explored, understood and appreciated the complexity and contradictions of the current academic literature and its implications for professional practice, and be able to identify open questions for their own research.

·  Demonstrated ability to learn and work independently in corporate finance, exercising critical judgement and discrimination in the resolution of complex problematic situations.

·  Used specialised and advanced technical, professional and academic skills in the analysis of relevant specific problems in corporate finance.

·  Had the opportunity to apply problem solving and analytical skills to issues in corporate finance.

In addition, you should also have had the opportunity to develop further the following key skills:

·  Written Communication – e.g. by writing summative assignments

·  Interpersonal Communication – e.g. by actively participating in lectures and seminars; by preparing and giving group presentations; by writing a group report for the case study.

·  Oral Communication – e.g. by presenting in seminars.

·  Teamwork – e.g. by preparing for seminars in groups.

·  Planning, Organising and Time Management – e.g. by preparing work for seminars; downloading handouts before relevant lectures; observing strict deadlines for  summative work.

·  Problem Solving and Analysis – e.g. by using a logical and analytical approach to answer question in preparation for seminars and case study.

·  Using Initiative - e.g. by organising teamwork and group presentations; searching relevant literature and information in preparation of summative work.

·  Numeracy – e.g. by being exposed to empirical applications in finance; applying core mathematical and statistical skills to answer a range of tutorial questions and preparing the case study.

·  Computer Literacy – e.g. by word-processing summative assignments; accessing and downloading from U-Learning teaching material; using e-mail to communicate with tutors and other students; using library on-line facilities and the web to search for literature. Finally, making use of the School Finance Databases, such as Datastream and Bloomberg.

·         Capital market and portfolio theory and its implication for corporate risk management

·         Risk and corporate capital budgeting

·         Source of finance and cost of capital

§         Information Asymmetry and Agency Theory

·         Corporate capital structure

·         Corporate dividend policy

·         Mergers and acquisitions
Company Valuation

The teaching and learning strategy is designed to allow students to come to grips with the essential quantitative nature of the subject, and more importantly, to facilitate the application to practical problems.

The teaching and learning methods include formal lecture and tutorial to impart theory, use of case studies and exercises to reinforce and test learning and the use of U-Learning to facilitate teaching, enhance the learning outcomes and direct students to the relevant reading in the set textbooks and in journal articles.

Recommended

Hillier et al. (2010), Corporate Finance, European Edition (McGraw Hill)

Supporting

Other books that you may wish to consider are:

Damodaran A., Applied Corporate Finance (Wiley), Second Edition

Vernimmen, P, et al. (2005) Corporate Finance: Theory and Practice. (John

Wiley & Sons)

This textbook addresses most of the topics taught in the module and it is recommended that you purchase it. It also covers the content of the financial theory modules that you attended in term 1, but with an emphasis on the applications of this theory to the corporate context.

The main advantages of this textbook when compared to the others mentioned below are that: (i) it is theoretically rigorous, but it sets off the theory against the daily practice of corporate finance; and (ii) although the topics are universal and thus their application ubiquitous, it is set in a European context. It also has a very interesting and informative web site.

Brealey, R and S Myers (2006) Principles of Corporate Finance, 8th edition. (McGraw-Hill)

[This is a ‘classic’ and an excellent introduction to most of the topic covered in the module. 

Other Indicative Reading

Articles and other material from the financial pages of newspapers and academic journals, such as:

Journal of Finance

Journal of Financial Economics

Review of Financial Studies

Journal of Financial and Quantitative Analysis

Financial Management Journal

Journal of Banking and Finance

Journal of Business Finance and Accounting

European Financial Management

Journal of Financial Research

Journal of Financial Review

Journal of Empirical Finance