IB9EM-15 Corporate Financial Management
Introductory description
To provide students with MSc level knowledge of concepts and issues in Corporate Financial Management that enables them to solve general problems in the field.
Module aims
The goal is that students get equipped to apply state of the art ideas of modern Corporate Financial Management theory as well as the quantitative tools to solving the types of problems faced by CFOs and other business executives who must make investment, financing, risk management and payout decisions taking account of flexibility and discretion under uncertainty, tax consequences, and financing effects. Students will also be able to trace the effects of considerations such as corporate and personal taxes, bankruptcy costs, information signaling and conflicts of interest on investment decisions and on financial structure decisions. Finally, students will understand the use of option- pricing techniques in corporate finance to evaluate corporate securities and investment projects.
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.
Valuation.
Financing and capital structure.
Capital structure and frictions.
Capital structure and incentives: financial contracting.
Capital budgeting: foundations.
Capital budgeting: extensions.
Corporate risk management.
Payout policy and cash management.
Corporate governance.
Learning outcomes
By the end of the module, students should be able to:
- Recognize and explain the key issues involved in corporate financial decisions within a firm relating to capital structure, capital budgeting, agency problems, payout policy, risk management, and corporate governance.
- Describe theoretical models of capital structure, capital budgeting, payout policy, risk management, and corporate governance in the presence of different market imperfections, including taxes, financing frictions, agency problems.
- Identify from the financial press and explain financial market activities related to corporate financial decisions happening in the market.
- Apply corporate finance models to interpret real world phenomena.
Indicative reading list
The core reading for this module consists of selected chapters from:
Berk, J., and P. DeMarzo “Corporate Finance,” 4th (global) edition, Pearson.
For a lower level preparatory reading (for those who feel they have weaker background in undergratuate level financial management):
Hillier, D., S. Ross, R. Westerfield, J. Jaffe, and B. Jordan “Corporate Finance,” 2nd (European) edition, McGraw Hill.
International
Cases of some multinational companies are used as examples in the module
Subject specific skills
Evaluate new investment projects and business decisions, such as changes to capital structure and payout policy, by using the quantitative financial modeling techniques, e.g., by recognizing changes to cash flows and their risk and using discounted cash flow methods while accounting for the price of risk.
Transferable skills
Written skills.
Problem solving.
Study time
| Type | Required |
|---|---|
| Lectures | 10 sessions of 2 hours (13%) |
| Seminars | 9 sessions of 1 hour (6%) |
| Private study | 121 hours (81%) |
| Total | 150 hours |
Private study description
Self study to include assessment preparation and pre-reading for lectures
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 | Eligible for self-certification | |
|---|---|---|---|
Assessment component |
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| Class Test | 25% | No | |
Reassessment component is the same |
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Assessment component |
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| In-person Examination | 75% | No | |
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Reassessment component is the same |
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Feedback on assessment
Feedback via My.WBS
Courses
This module is Core for:
- Year 1 of TIBS-LN1J Postgraduate Taught Finance and Economics
This module is Core optional for:
- Year 1 of TIBS-N4N3 MSc in Accounting and Finance