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BU3631 Corporate Finance and Equity Valuation

(5  ECTS credits)

Lecturer(s):

Professor Brian Lucey
Tutor: Ms Pia Helbing

Module Description/Content

This module builds on the SF Introduction to Finance Course BU2550. Complements the JS Econ Modules while showing reality of the situation.

Topics covered in this approximate order:

  1. How do we value simple stocks and bonds? What can bond prices tell us about the macroeconomy?
  2. Uncertainty, risk and the historical evidence of crises.
  3. What about diversification? How can we deal with risk in assets and what is risk anyhow?
  4. The Capital Asset Pricing model and its successors - useful or useless?
  5. How do firms finance themselves in theory and in practice?
  6. Valuing firms again – a cookbook.
  7. Dividends, dividend policies and sustainability.
  8. An introduction to risk management tools.
  9. Mergers, acquisitions and the market for corporate control.
  10. The financial crisis and the crisis in finance.

Learning Outcomes

On Successful completion of this course, students will be able to:

  • Evaluate the decision to merge or acquire a company.
  • Calculate the cost of capital and the component parts of same.
  • Propose and evaluate alterative capital structures for a company.
  • Evaluate dividend policies and processes.

Finally, as this is a non-compulsory course, an interest in the area is assumed! 

Required Reading

There is no set text. Any corporate finance text will suffice. Additional readings will be flagged in class.

Assessment

An individual assignment, 30% of the grade.
End of Year Examination, 70% of the grade.
Assessment for the individual assignment and submission details will be provided in the first lecture.

Examination

End of year examination x 2 hours.