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Module Catalogue

IB236-15 Finance 2: Corporate Finance

Department
Warwick Business School
Level
Undergraduate Level 2
Module leader
Zhun Liu
Credit value
15
Module duration
10 weeks
Assessment
Multiple
Study location
University of Warwick main campus, Coventry

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Introductory description

This is an elective module available for WBS and non-WBS students.

Students will understand principles underlying financial decision making by corporations. They will develop a solid understanding of financing and investment decisions; options, futures, forwards, warrants and convertibles; valuation techniques for investment appraisals. Some new corporate finance topics are introduced such as mergers and acquisitions, real options, and corporate risk management.

Module web page

Module aims
  • Make students critically aware of the key financial decisions taken by firms.
  • Develop in students a sound understanding of the main theories and models of Corporate Finance.
  • Make students aware of key empirical tests of those models, and their implications.
  • Provide students with structured opportunities to practise using the key tools and techniques of Corporate Finance.
  • Prepare students for advanced undergraduate and postgraduate studies in Finance.
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.

  • Cost of Capital
  • Risky debt
  • Capital Structure
  • Payout Policy
  • Company valuation
  • Options
  • International Corporate Finance
  • Initial Public Offerings
Learning outcomes

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

  • Critically assess the factors that determine the optimal investment, financing and payout decisions of a firm.
  • Compute the cost of capital of a firm under alternative assumptions.
  • Use alternative methods for valuing firms to gain important insights into value drivers.
  • Discuss the main motives for mergers and acquisitions.
  • Identify the reasons why firms raise capital.
  • Explain key theoretical models and the assumptions that underpin those models, and reflect critically on the limitations of those models.
  • Interpret empirical evidence.
  • Solve numerical problems and analyse case-study information.
  • Communicate complex ideas effectively.
Indicative reading list

Hiller D, Ross SA, Westerfield RW, Jaffe J & Jordan BD, Corporate Finance, (4th edition, McGraw-Hill 2016).
Berk J & DeMarzo P, Corporate Finance, (2nd edition, Pearson 2010).

Subject specific skills

Discuss topical issues about the theory and practice of Corporate Finance.
Construct spreadsheets to value the equity and debt in a firm’s capital structure, and test the robustness of those values to changes in key inputs.
Explain and interpret corporate financial information from the financial press.
Use web-based resources to retrieve, process and interpret corporate financial data.

Transferable skills

Solve structured numerical problems.
Write informed critiques of important topics in Corporate Finance theory.
Analyse case studies and formulate arguments to support a particular solution.

Study time

Type Required
Lectures 10 sessions of 1 hour (7%)
Seminars 9 sessions of 1 hour (6%)
Online learning (independent) 10 sessions of 1 hour (7%)
Private study 48 hours (32%)
Assessment 73 hours (49%)
Total 150 hours
Private study description

Private Study.

Costs

No further costs have been identified for this module.

You do not need to pass all assessment components to pass the module.

Assessment group D3
Weighting Study time
Participation 10% 8 hours
In-person Examination 90% 65 hours
  • Answerbook Gold (24 page)
  • Students may use a calculator
Assessment group R3
Weighting Study time
In-person Examination - Resit 100%

Exam

  • Answerbook Gold (24 page)
Feedback on assessment

Feedback will be provided via my.wbs.

Past exam papers for IB236

Pre-requisites

To take this module, you must have passed:

Courses

This module is Optional for:

  • UIBA-N20B BSc in Management
    • Year 2 of N20B Management
    • Year 2 of N20B Management
    • Year 2 of N23K Management with Accounting
    • Year 2 of N234 Management with Digital Business
    • Year 2 of N235 Management with Entrepreneurship
    • Year 2 of N232 Management with Finance
    • Year 2 of N252 Management with Marketing
    • Year 2 of N23L Management with Strategy and Organisation
  • Year 2 of UIBA-N400 Undergraduate Accounting and Finance
  • UIBA-N404 Undergraduate Accounting and Finance (with Foundation Year and Placement/Undergraduate Partnership Programme)
    • Year 3 of N404 Accounting and Finance (Foundation Year and Placement)
    • Year 3 of N405 Accounting and Finance (Foundation Year and UPP)
    • Year 3 of N403 Accounting and Finance (with Foundation Year)
  • Year 3 of UIBA-N403 Undergraduate Accounting and Finance (with Foundation Year)
  • UIBA-N401 Undergraduate Accounting and Finance (with Placement Year/Undergraduate Partnership Programme)
    • Year 2 of N401 Accounting and Finance (Placement)
    • Year 2 of N402 Accounting and Finance (Undergraduate Partnership Programme)
  • Year 3 of UCSA-I1N1 Undergraduate Computer Science with Business Studies
  • Year 4 of UCSA-I1NA Undergraduate Computer Science with Business Studies (with Intercalated Year)
  • Year 1 of UIOA-EEU Undergraduate EU Exchange
  • UGEA-RN21 Undergraduate German and Business Studies
    • Year 2 of RN21 German and Business Studies
    • Year 4 of RN21 German and Business Studies
  • UIPA-L8N1 Undergraduate Global Sustainable Development and Business
    • Year 2 of L8N1 Global Sustainable Development and Business Studies
    • Year 3 of L8N1 Global Sustainable Development and Business Studies
  • UIPA-L8N2 Undergraduate Global Sustainable Development and Business Studies (with Intercalated Year)
    • Year 2 of L8N2 Global Sustainable Development and Business Studies (with Intercalated Year)
    • Year 4 of L8N2 Global Sustainable Development and Business Studies (with Intercalated Year)
  • UIBA-N20F Undergraduate International Management
    • Year 2 of N20F International Management
    • Year 2 of N20F International Management
    • Year 2 of N20S International Management (with Accounting)
    • Year 2 of N20T International Management (with Chinese)
    • Year 2 of N20P International Management (with Entrepreneurship)
    • Year 2 of N20M International Management (with Finance)
    • Year 2 of N20U International Management (with French)
    • Year 2 of N20L International Management (with Marketing)
    • Year 2 of N20V International Management (with Spanish)
    • Year 2 of N20W International Management (with Strategy and Organisation)
    • Year 2 of N20N International Management with Digital Business
    • Year 2 of N20E Management (with Foundation Year)
    • Year 2 of N234 Management with Digital Business
  • UIBA-N220 Undergraduate International Management (with Foundation Year)
    • Year 4 of N220 International Management (with Foundation Year)
    • Year 4 of N221 International Management with Accounting (with Foundation Year)
    • Year 4 of N226 International Management with Chinese (with Foundation Year)
    • Year 4 of N223 International Management with Digital Business (with Foundation Year)
    • Year 4 of N224 International Management with Entrepreneurship (with Foundation Year)
    • Year 4 of N222 International Management with Finance (with Foundation Year)
    • Year 4 of N227 International Management with French (with Foundation Year)
    • Year 4 of N225 International Management with Marketing (with Foundation Year)
    • Year 4 of N228 International Management with Spanish (with Foundation Year)
    • Year 4 of N229 International Management with Strategy and Organisation (with Foundation Year)
  • UIBA-N20J Undergraduate Management (with Foundation Year and Placement Year/Undergraduate Partnership Programme)
    • Year 3 of N20J Management (Foundation Year and Placement)
    • Year 3 of N20K Management (Foundation Year and UPP)
    • Year 3 of N23H Management with Digital Business (with Foundation Year and Placement Year)
    • Year 3 of N23J Management with Entrepreneurship (with Foundation Year and Placement Year)
    • Year 3 of N23G Management with Finance (with Foundation Year and Placement Year)
    • Year 3 of N255 Management with Marketing (with Foundation Year and Placement Year)
  • UIBA-N20E Undergraduate Management (with Foundation Year)
    • Year 3 of N20E Management (with Foundation Year)
    • Year 3 of N23N Management with Accounting (with Foundation Year and Placement Year)
    • Year 3 of N23M Management with Accounting (with Foundation Year)
    • Year 3 of N23E Management with Digital Business (with Foundation Year)
    • Year 3 of N23F Management with Entrepreneurship (with Foundation Year)
    • Year 3 of N23D Management with Finance (with Foundation Year)
    • Year 3 of N252 Management with Marketing
    • Year 3 of N254 Management with Marketing (with Foundation Year)
    • Year 3 of N23P Management with Strategy and Organisation (with Foundation Year)
  • UIBA-N20C Undergraduate Management (with Placement Year/Undergraduate Partnership Programme)
    • Year 2 of N20M International Management (with Finance)
    • Year 2 of N20B Management
    • Year 2 of N20D Management (Undergraduate Partnership Programme)
    • Year 2 of N20C Management (with Placement Year)
    • Year 2 of N20Q Management with Accounting (with Placement Year)
    • Year 2 of N236 Management with Digital Business (with Placement Year)
    • Year 2 of N237 Management with Entrepreneurship (with Placement Year)
    • Year 2 of N232 Management with Finance
    • Year 2 of N233 Management with Finance (with Placement Year)
    • Year 2 of N253 Management with Marketing (with Placement Year)
    • Year 2 of N20R Management with Strategy and Organisation (with Placement Year)
  • Year 1 of UIOA-EOS Undergraduate Overseas Exchange
  • Year 4 of UPXA-F3ND Undergraduate Physics and Business Studies (with Intercalated Year)
  • Year 3 of UPXA-F3N2 Undergraduate Physics with Business Studies
  • Year 1 of UIOA-EUS Undergraduate USA Exchange