School of Management, Unit Catalogue 2010/11 |
MN10311: Corporate finance and investment appraisal |
 Credits:
| 6 |
| Level:
| Certificate |
| Period: | This unit is available in... |
| Semester 2 |
| Assessment:
| EX 100% |
| Supplementary Assessment: | Like-for-like reassessment (where allowed by programme regulations) |
| Requisites:
| Before taking this unit you must take MN10008 or take ES10004 This unit is not available to visiting/exchange students. |
| Description:
| Aims: The unit introduces students to the issues involved in a firm's investment and financing decisions. Students will develop a knowledge of new investment appraisal, cost of capital, and the effect of capital structure on the value of the firm. The course will proceed to consider issues such as desirable capital structure, dividend policy, financial distress, and the use of options as financial building blocks. This course provides a basis for (and is a pre-requisite for) the 2nd year Advanced Corporate Finance course. Learning Outcomes: By the end of this unit, the student should be able to: * Analyse investment appraisal problems. * Estimate a firm's cost of capital. * Calculate a firm's optimal capital structure in the basic Miller-Modigliani model (with and without tax). * Describe the issues involved in determining a firm's optimal capital structure. * Describe the issues involved in determining a firm's optimal dividend policy. Skills: * Intellectual Skills (T/F/A) * Professional Practical Skills (T/F/A) * Transferable/ Key Skills (T/F/A) Content: * New Investment Appraisal. * Cost of Capital (WACC and the dividend growth, and CAPM). * Capital structure and its relation to firm value. * Effect of new projects with different capital structures and risk on firm value. * Dividend policy (Dividend Irrelevance and Gordon Growth model). * Options as financial building blocks. |