Introductory description

This module aims to provide students with a fundamental understanding of corporate finance theory and practice. It reviews basic theories and applications in firm capital structure decisions, corporate risk management, corporate governance, capital budgeting and payout policy of corporations.

Module aims

Outline syllabus

This is an indicative module outline only to give an indication of the sort of topics that may be covered. Actual sessions held may differ.

Indicative syllabus:
Capital Budgeting
Theories and Implications of Capital Structure
Long-term Financing Alternatives
Corporate Risk Management & Application of Options
Corporate Governance
Payout Policy

Learning outcomes

By the end of the module, students should be able to:

• Demonstrate a deep understanding of corporate finance theories and tools, and the principles of capital budgeting.
• Demonstrate an understanding of the applications of options in corporate finance.
• Demonstrate an understanding of the determinants of the firm's capital structure.
• Demonstrate an understanding of agency theory and its applications.
• Demonstrate an understanding of long-term financing alternatives.
• Application of financial and basic mathematical logic and reasoning.

Indicative reading list

Berk, J. and DeMarzo, P., Corporate Finance, 5th - edition, Prentice Hall, 2019.
Brealey, Myers and Allen, Principles of Corporate Finance, 13th - edition, International Student Edition, McGraw-Hill, 2019.
Hiller, D., Ross S.A., Westerfield R.W., Jaffe J. and Jordan B.D., Corporate Finance, 3rd - (European) edition, McGraw-Hill, 2016.

Subject specific skills

Understand and apply options and other financial tools for corporate risk management.
Evaluate payout policy examples.
Evaluate cases for corporate governance mechanism.
Describe models of capital structure and agency theory and evaluate cases of capital structure decisions.

Transferable skills

Numeracy.
Written communication.