MBA PROGRAMME: 2015 Appendix 1
FINANCE AND RESPONSIBLE INVESTMENT SUBJECT CODE: CMBC 191
STUDY GUIDE AND COURSE OUTLINE
1. Lecturing Dates February 7 February 27 March 27 April 17 May 17 May 22 2. Module Designation
Qualification standard (s) : MBA
Faculty : Management and Law
School : Graduate School of Leadership Department : MBA Programme
Discipline : Management
Name of Module : Finance and Responsible Investment Module Code : CMBC 191
NQF Field : Management
NQF Sub – Field : Business Management NQF Level : 08
Year Level : 02 Credit Total : 12
Issue Date : 01 January 2015 Expiry Date : December 2015 Implementation date : 01 January 2015
3. Entry Assumptions First degree or equivalent
4. Notional Hours
Lectures 40 Reading and Tutoring 50
Assessment 30
TOTAL 120
5. Syllabus
Introduction to strategic financial management Time value of money
Asset pricing- financial assets Risk, return and portfolio analysis Analysis of financial statements Cost of capital and capital structure
Capital investment and budgeting decisions under certainty and uncertainty and issues relating to foreign exchange and derivatives
Working capital management decisions
Environmental, social and governance (ESG) factors in investment decisions and socially responsible investment (SRI) issues in fund management including its effect on risk and return in the context of green companies and projects.
6. Moderation Internal and External
7. Facilitator and Contact Information Michael Bamidele, FAKOYA
School of Accountancy University of Limpopo,
Private Bag X1106, SOVENGA, 0727. Tel: 015 268 3312; Fax: 015 268 3526 E-mail: [email protected]
Room 2047 (New “R” Block), Turfloop Campus.
8. Consultation Hours
Students are welcome to contact their facilitator during office hours at the above contact numbers or E-mail address to arrange an appointment for consultation.
9. Specific Outcomes
After completion of this module, the student will be able to:
Explain and evaluate the concepts of risk and return in financial markets.
Demonstrate how to construct a portfolio and calculate returns using asset pricing
models. Appreciate the principles of valuing securities and how their sensitivity to interest rates
can be assessed. Explain the concept of cost of capital and how to estimate this for a corporation.
Evaluate the attractiveness of real investment projects based on expected cash flows
and cost of capital.
Explain how to manage financial risk, including the use of derivatives.
Assess the challenges of introducing ESG factors in investment decisions.
Evaluate the evidence on SRI funds and risk and returns in the context of green
companies and projects.
10. Instructional Style and Methodology
The aim of this course is to apply practice-oriented lecturing to enable the student to apply the knowledge in the work environment. The instructional style consists of:
Lectures Individual Assignments Group Assignments Group Discussions Case Studies Class Presentations Tests Examination
Emphasis is placed on the practical application of theory. The aim of the course is output-oriented. Students must consistently attempt to reach a high level of independent study. Study units must be prepared in advance of lectures and in accordance with the course content and course programme. Students must further enhance their learning experience by doing extra reading from the list of recommended reading.
11. Course Content
The course is organized into the following broad sections: Introduction to strategic financial management
o Understand the objective of the firm- wealth maximisation o Functions of financial management and the financial manager o Elements of strategic financial management
Time value of money
o Understand the concept of TVM
o Differentiate between present and future values
o Explain the terms, types, differentiate and calculate annuities
o Differences between annual percentage rate (APR) and effective annual rate (EAR)
o Calculation of amortized loans
o Determine the return (interest rate) on an investment (loan) Asset pricing- financial assets
o Explain the concept of debt, preferred stock, and equity, their types and characteristics
o Explain bond ratings and information provided by bond rating agencies o Determine bond prices and YTM; equity prices and yields
o Discuss the approaches or techniques used to value stocks o Explain the relationship between bond prices and interest rates Risk, return and portfolio analysis
o Explain and evaluate the concept of risk and return in financial markets o Calculate portfolio risk and return using capital asset pricing model
(CAPM)
Analysis of financial statements Cost of capital and capital structure
o Explain the concept of cost of capital and estimate the weighted average cost of capital (WACC) for a company
o Discuss the components of the capital structure
Capital investment and budgeting decisions under certainty and uncertainty and issues relating to foreign exchange and derivatives
o Evaluate the attractiveness of real investment projects based on expected cash flows and cost of capital
o Calculate the payback period (PBP), net present value (NPV) and inter rate of return (IRR) of investment projects
o Explain how to manage financial risk including the use of derivatives Working capital management decisions
o Explain working capital management and why it is crucial to the survival of a business
o Discuss the relationships among working capital accounts
o Understand the cash conversion cycle and its importance to the firm o Evaluate the appropriateness of working capital investment policy to a
firm
o Explain the approach a firm should adopt to finance its working capital needs
Environmental, social and governance (ESG) factors in investment decisions o Assess the challenges of introducing ESG factors in investment decisions Socially responsible investment (SRI) issues in fund management including its
effect on risk and return in the context of green companies and projects
o Evaluate the evidence on SRI funds and risk and return in the context of green companies and projects
Case studies- group and individual 1. Prescribed Book
Besley, S and Brigham, E.F. 2013. CFIN 3, 3rd Edition, USA: South-Western Cengage Learning. ISBN-10: 1133626408. ISBN-13: 9781133626404 2. Recommended Reading
Gitman, LJ & Zutter, CJ. Principles of Managerial Finance 14th Edition, Prentice Hall; ISBN-10: 0133507696. ISBN-13: 978-0133507690
Newspapers and Journals
Financial Mail: www.financialmail.co.za
Public Finance Quarterly: www.asz.hu/en/public-finance-quarterly/about Public Finance Review: www.pfr.sagepub.com
Assessments
a. Forms of Assessment:
Individual assignments, group assignments, case studies, presentations, tests and examination
i. Formative assessment: 50% of the final mark
a. Individual assignment
b. Group assignment or second individual assignment c. Test
Total: Year Mark 100%
14.2 Summative Assessment:
Final mark: = (Year mark + Exam mark ÷2)
ii. Assignments
Assignment Submission Dates and Test Dates.
Assignment Date Assigned Submission Dates
I February 7 March 27
II April 17 May 17
Test May17 May 17
Study Schedule Date Study Schedule
Feb. 7 Introduction to strategic financial management Time value of money
Feb. 27 Asset pricing- financial assets Risk, return and portfolio analysis Mar. 27 Analysis of financial statements
Cost of capital and capital structure
Apr. 17 Capital investment and budgeting decisions under certainty and uncertainty and issues relating to foreign exchange and derivatives
Working capital management decisions
May 17 Environmental, social and governance (ESG) factors in investment decisions and socially responsible investment (SRI) issues in fund management
including its effect on risk and return in the context of green companies and projects.
Appendix 2
Purpose and characteristics of a taught Master degree
The primary purposes of a Master's Degree are to educate and train, or prepare graduates for advanced and specialised professional employment.
A Master's Degree may be earned in either of two ways: (1) by completing a single dissertation, or (2) by successfully completing a course work programme requiring a high level of theoretical engagement and intellectual independence and a research project, culminating in the acceptance of a dissertation.
Master's graduates must be able to deal with complex issues both systematically and creatively, make sound judgments using data and information at their disposal and communicate their conclusions clearly to specialist and non-specialist audiences, demonstrate self-direction and originality in tackling and solving problems, act autonomously in planning and implementing tasks at a professional or equivalent level, and continue to advance their knowledge, understanding and skills.
Prof. MB Fakoya Lecturer
