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BUU33630 Corporate Finance and Equity Valuation

(5  ECTS credits) - Semester Two

Lecturer(s):

Dr. Periklis Boumparis

Module Description/Content

How does a company make a decision to invest in a new production line? Does a firm’s corporate governance structure impact firm value? What, if any, are the ethical aspects of finance? What tools are commonly used to determine the financial health of a company? Does it matter if a company pays dividends, and if so to whom? What sorts of tools are available to tell an investor the return she should expect from a stock? What sort of risks are companies exposed to and how should they manage them? How much should a company pay for another in a merger situation?

These commonly asked financial questions form the core issues that we will address in this course. In the course we will be concerned both with the practice and theory of managerial decision making in relation to these and related questions. Much of this course is related to material that would typically be covered in the Chartered Financial Analyst examination at Level I and Level II for the corporate finance area. The CFA is a professional, graduate level, qualification. It is eminently suited to those who are interested in financial analysis, fund management, equity analysis, financial research etc. Details of the qualification and the CFA institute can be found at their website, www.cfainstitute.org. CFA candidates take three levels of examinations. The required skills etc. on which they are examined are contained in the CFA Body of Knowledge. However, please note that this course is independent of and not associated with the CFA Institute.

Lecture and Teaching Approach

  • 1 lecture per week
  • 1 tutorial per week

Our lectures are designed to provide overview and outline of the main areas and concepts of the topic under discussion. In the tutorials homework assignments previously provided will be worked through and ‘ideal’ solutions provided to them. The tutorials will also provide you with an opportunity to query regarding material in the course. While tutorial attendance is not compulsory it is highly recommended.

Learning Outcomes

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

  • Evaluate the corporate governance structure of a company
  • Analyse investments using advanced investment appraisal techniques
  • Evaluate the overall working capital effectiveness of a company
  • Evaluate the financial health of a company
  • Evaluate the sources of finance available to a company and discuss the impact of the banking crisis on SMEs
  • Understand the nature and types of risk and evaluate the approaches to risk management.
  • Evaluate the decision to merge or acquire a company.

Textbooks and Required Resources

Recommended textbooks:

  1. Corporate Finance: A Practical Approach, 2nd Edition Michelle R. Clayman, Martin S. Fridson, George H. Troughton, Matthew Scanlan. ISBN: 978-1-118-21731-3.
  1. Financial Management (FM) by Kaplan Publishing

Pre-requisite

BUU22550 Introduction to Finance (SF Year)

Assessment

An assignment, 30% of the grade.
An individual examination, 70% of the grade.