FE3002 Corporate Financial Management

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					FE3002 Corporate Financial Management

Level:                       3
Credit Value:                20


Unit Leader: Yiannis Anagnostopoulos

                                  Main Aim(s) of the Unit:

The Unit is designed to enable students to:

      *critically examine the role of financial management in corporate governance
      analyse, under a range of circumstances, whether or not a capital project adds value
       to a business
      evaluate the theoretical and practical considerations underlying the financing
       decisions of a company
      discuss the need for, and apply the techniques of, financial planning including
       working capital management and risk management.
      undertake postgraduate studies in corporate finance.


                                   Main Topics of Study:

   1. The nature and objective of financial decision making, agency problems and
       shareholder wealth maximization
   2. The traditional and discounted cash flow approaches to capital budgeting under a
       range of situations including capital rationing, optimal replacement periods, project
       abandonment and mutual exclusivity of projects
   3. Risk management in investment appraisal
   4. Major sources of capital, cost of the sources and weighted average cost of capital
   5. Portfolio risk and return, market portfolio and optimum diversification
   6. Capital asset pricing model and arbitrage pricing theory
   7. Valuation of options, the Black and Scholes model, put-call parity and uses of share
       options
   8. Capital structure and value of the company, real world considerations and empirical
       evidence
   9. The dividend controversy, possible dividend policies and practical influences on
       dividend payout decision
   10. Motives for mergers and acquisitions, settlement methods and terms, defence
       strategies and tactics and reasons for failure of mergers
   11. Financial planning and working capital cycle, cash management and the treasury
       function.
                               Learning Outcomes for the Unit

  1. In the context of today’s global financial environment, explain and analyse the main
     decision areas in corporate finance
  2. Apply and evaluate investment appraisal techniques to a range of investment scenarios
     involving risk and uncertainty.
  3. Examine, based upon research in the relevant literature, the theoretical and practical
     justifications and ramifications of the various techniques available to a company to
     increase shareholder value
  4. Communicate effectively through discussion of group case studies that will help
     develop critical thinking and independent judgement.




Cognitive/Intellectual skills
Analysis             Synthesis             Evaluation               Application
1                                          2,3                      2
Key /transferable skills
Group        Learning        Self          Management       Autonomy        Communications
working      resources       Evaluation    of information

4                                          2,4              4               4
Problem
solving

2,3

Teaching/ learning methods/strategies used to enable the achievement of learning
outcomes:


For students studying without attendance by flexible (distance) learning:

Learning will be supported through a study guide accompanying a textbook. The study
guide will encourage active learning through a sequence of activities and self
assessment questions, sometimes delivered via WebCT. In addition email contact with
the tutor will be available.


Summary of the diagnostic and formative assessment methods used in this module


Students will be given exercises, problems, questions and case studies early in the
semester. They will then be used during the tutorials to both reinforce the key points
made in the lecture as well as to identify areas requiring particular attention.
Moreover, the variety of formative assessment methods used will develop a range of
transferable and intellectual skills while at the same time helping students prepare for
their coursework and final examination. The coursework will consist of group case
study that will help develop students’ ability to analyse, evaluate and synthesise
financial data and to be able to communicate such information in a professional
manner. The final examination will focus more on testing students’ understanding and
knowledge of corporate financial management mainly, although not exclusively,
through problem solving.
Summative assessment methods which enable student to                       Weighting:
demonstrate the learning outcomes for the Unit:

Group management report based on a case study                              40%

2-hour unseen examination                                                  60%



Indicative Reading for this Unit:

Watson. H.D. & Head A, 2004 Corporate Finance 3rd Edition

Broyles J., Financial Management and Real Options, 2003, J Wiley

Lumby S and Jones C., Corporate finance: theory and practice, 2003, Thompson

Cases drawn from the European case Clearing House, Cranfield University

Additionally, students will be regularly referred to appropriate articles in such journals
as Harvard Business Review, Financial Management and Management Quarterly.


Teaching and        Activity
Learning Time
(10 hrs per
credit):
                    For students studying without attendance total study time is
200 hours           expected to be 200 hours, this to be spent on carrying out activities
                    and self assessment questions in the module study guide as well as
                    in wider reading and preparation for summative assessments.