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MN10669: Fundamentals of finance

[Page last updated: 20 April 2021]

Academic Year: 2021/2
Owning Department/School: School of Management
Credits: 12      [equivalent to 24 CATS credits]
Notional Study Hours: 240
Level: Certificate (FHEQ level 4)
Period:
Academic Year
Assessment Summary: CW 40%, EX 60%
Supplementary Assessment:
Like-for-like reassessment (where allowed by programme regulations)
Requisites: In taking this module you cannot take MN10311 OR take MN10500 OR take MN10571
Aims: This unit aims to give students an understanding of the fundamental concepts and techniques relating to the management of personal and corporate finance. It will introduce returns, risks, financial planning and forecasting.
Students will be introduced to the major personal financial products such as mortgages, independent savings accounts (ISAs), personal investments and insurance. The impact of taxation upon personal financial decisions will also be considered.
The mathematical techniques of finance such as compound interest, future values, present values and internal rates of return will be introduced at a personal level and then extended into the corporate context.
The unit then introduces students to the issues involved in a firm's investment and financing decisions. Students will develop a knowledge of the main capital markets, 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, and financial distress. 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 the factors affecting personal finances at different stages in the life cycle of individuals and families.
* Analyse characteristics of instruments and methods designed to achieve short, medium and long term personal financial goals.
* Analyse risks in personal wealth and money management: identify hazards of life.
* Identify, describe and use investment appraisal techniques.
* Estimate a firm's cost of capital.
* Discuss 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 dividend policy.

Skills: Intellectual Skills (T/F/A)
Professional Practical Skills (T/F/A)
Transferable/Key Skills (T/F/A)

Content: Personal finance decisions
Financial stability and independence of individuals and families
Various personal financial products such as mortgages, annuities, savings and so on
The different types of capital markets - the banking system, bonds, stocks, currencies, derivatives
The time value of money
Sources of finance and the characteristics of debt and equity
Investment Appraisal.
Cost of Capital (WACC, 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. Theories and practicalities.

Programme availability:
NB. Postgraduate programme information will be added when the postgraduate catalogues are published in August 2021

MN10669 is Compulsory on the following programmes:

School of Management
  • UMMN-AFB02 : BSc(Hons) Accounting and Finance (Year 1)
  • UMMN-AKB02 : BSc(Hons) Accounting and Finance with Year long work placement (Year 1)

Notes:

  • This unit catalogue is applicable for the 2021/22 academic year only. Students continuing their studies into 2022/23 and beyond should not assume that this unit will be available in future years in the format displayed here for 2021/22.
  • Programmes and units are subject to change in accordance with normal University procedures.
  • Availability of units will be subject to constraints such as staff availability, minimum and maximum group sizes, and timetabling factors as well as a student's ability to meet any pre-requisite rules.
  • Find out more about these and other important University terms and conditions here.