Aims

This module develops an understanding of the latest developments in the world of financial markets and examines practical issues involved in a firm's investment and financing decisions. Students will analyze issues relating to new investment appraisal, cost of capital, the effect of capital structure on firm value (particularly the effects of managerial incentives and signaling on a firm's financing decisions). Finally, the module will consider the risks that exist in foreign exchange, foreign trade and investment, and the use of techniques to manage such risks. Principles essential to the understanding of global financial problems will be identified alongside the policies and practices multinational companies employ to contend with these problems. After completion of the module students will be equipped with suitable theories and tools and be able to apply them to real world issues.

The module aims to enable students:
• to perform numerical analyses of investment appraisal and capital structure decisions
• To apply theories and quantitative analytical tools to effectively evaluate risks faced by firms and make financial decisions.
• to develop students’ understanding of investment and portfolio decisions, valuation of securities, and the effect of trading decisions on the behaviour of the financial markets.

Outline Of Syllabus

1.       Foundations of Finance
2.       Time value of money and present values
3.       The valuation of equity and debt
4.       Risk and Return in Financial Markets
5.       Portfolio theory
6.       Asset pricing
7.       The Efficiency of Financial Markets
8.       Overview of corporate financing
9.       Capital structure theories
10.       International financial markets: risks and opportunities

Teaching Rationale And Relationship

The mix of teaching methods is designed to reflect the skills based nature of the module.

Lectures will provide key concepts, backed up by guided reading. The lecture mode is used to impart basic knowledge and understanding, although lecture sessions will also involve some elements of discussion and workshop activity.

The seminar workshops will focus on case studies and roleplays that enable students to then apply the techniques. Student discussion of issues develops understanding and helps develop certain key skills.

The subject requires a good deal of additional reading to supplement the lectures and provide a greater depth of understanding, as well as increasing exposure to the research literature. The coursework provides an opportunity to practise certain professional and cognitive skills and gain feedback thereon.

Assessment Rationale And Relationship

The formal examination assesses the students' intended knowledge and skills outcomes, as well as problem solving, numeracy and written communication skills.