Course Information Undergraduate prospectus

Finance

Course summary

Course code: FINA1027
Level: 6
Credits: 30
School: Business Faculty
Department: Accounting and Finance
Course Coordinator(s): Patricia Ntozi-Obwale

Specification

Pre and co requisites

None.

Aims

This course will explain the firm objective of maximising wealth of the shareholder. The internal policies undertaken by the firm to attain this goal will be examined. Basic finance concepts and tools of analysis used by firms and investors will be understood and applied. These concepts include capital budgeting, risk-return relationships, cost of capital, dividend policy, risk management, and working capital management. Students will also become familiar with the various types of financing available to a firm and how to value shares and bonds. There will be an emphasis on a practical application of the knowledge gained during the course.

Learning outcomes

1. Critically appraise the preferences and behaviour of investors. They will evaluate business decisions such as capital structure and dividend decisions that are influenced by investor requirements and examine their practical implications.
2. Examine the techniques that should be applied to efficiently implement financial decisions and activities within an organisation. Students will analyse projects and business opportunities, evaluate the impact of mergers and acquisitions, and perform valuations of financial instruments such as debt and equity.
3. Students will value a range of securities and choose the best combination that provides the highest return but minimises risk in portfolio management. These analytical skills will ncover a range of investment and corporate finance topics mandatory for the business world.
4. Demonstrate problem solving and critical skills in analysing financial information such as capital budgeting. Students will improve numeracy skills, including ability to manipulate financial and other numerical data.
5. Demonstrate skills in the use of communications in acquiring, analysing and communicating information. The student will be able to implement a number of techniques that will enhance the shareholder value of a firm.

Indicative content

The Finance Function
Capital Markets – Efficient Market Hypothesis
Investment Appraisal Methods
Investment Appraisal –Application and Risk
Multinational Companies – Foreign Direct Investment
Share Valuation
Equity Finance
Bond Valuation
Debt Finance
Cost of Capital – WACC
Capital Structure
Dividend Policy
Portfolio Theory
Capital Asset Pricing Model
Risk Management – Currency Options and Interest Rate Risk
Working Capital Management – Policies
Working Capital Management – Inventory/ Cash / Receivables
Business Valuation
Mergers and Acquisitions

Teaching and learning activity

A combination of lectures and tutorials are conducted on this course; all once a week. Lectures take on a presentation form to give an initial understanding of the topic, while the small group tutorials encourage application. The undergraduates are encouraged to own a text book and provided with recommended reading each week before attempting the assigned tutorial questions. Further discussion of the week’s material is conducted in support sessions to further explain some of the concepts or questions of the given tutorial for the week that may not have been understood. Three revision sessions are conducted near to the class test and exam to discuss previous questions.

Assessment

Exam 1 - 30% weighting, 40% pass mark, learning outcomes 1-5. Outline Details - A mix of half computational and descriptive questions.

Exam 2 - 70% weighting, 70% pass mark, learning outcomes 1-5. OUtline Details - One compulsory question with 40 marks and 3 optional questions chosen each of 20 marks.

Students are not required to pass all components in order to pass the course.