Corporate Finance

Finance/Commerce

Course Code (Undergraduate): 010798

Course Code (Postgraduate): 2010798

48 Contact Hours

7.5 ECTS points Credit Points

Course Description

The course introduces students to corporate financial management and the key principles underlying this area. Students are provided with strong foundational knowledge necessary for understanding how corporations make informed financial decisions.

Students will be looking at the types of securities used in raising external funds and other ways of sourcing capital. A thorough market analysis involving external factors such as tax, financial distress, obtaining information and third-party agencies will be made through applying the capital structure theory. Other areas analysed include options and liquidity management.
Towards the end of the course, students are exposed to topics addressing corporate governance and control markets. Theoretical components of the course are supplemented with relevant examples and case studies which help to enhance student understanding on the topic.

Timetable

Schedule and Topics

1. Course Introduction
2. Corporate Financing Decision
3. Capital Structure in a Perfect Market vs. in an imperfect market
4. Optimal Capital Structure
5. Cost of Capital:
6. Project Valuation
7. Cash Flow Risk Analysis
8. Corporate payout decision
9. Options
10. Corporate Liquidity Management
11. Corporate Cash Holdings
12. The market for Corporate Control
13. Corporate Governance

Assessments

Class participation marks (10%);
Quiz (2* 20% each);
Final examination (50%).

Prerequisite

Sound knowledge of topics covered in introductory finance courses is a necessary basis for satisfactory completion of this course.

Reference Books

Peirson, G., Brown, R., Easton, S., Howard, P. & Pinder S. Business Finance, McGraw-Hill, 12th edition, 2014
Course materials (including lecture notes, supplementary readings and solutions to assignment questions) are handed out during the class.