Unit Information Form (UIF)
UIF1112The UIF provides essential information to students, staff teams and others on a particular unit. Please refer to the University’s Guidance notes on Unit Information Forms before completing the details below
SECTION 1 - Changes made to Section 1 of the UIF will require Faculty level approval. If substantial changes to Units/Courses are required, consult with Sub Dean (Quality Enhancement) for advice
Unit Name Corporate Finance
Unit Code AAF002-6
Level 7
Credit Value 15
Location of Delivery Putteridge Bury
Summary/Overview
Corporate Finance relates to the study of the activities of financial managers and the impact of those activities in the financial markets. A financial market is a forum whereby the activities of lending and borrowing and the buying and selling of financial assets take place. Consequently, the decisions of managers at a corporate level will impact on such buying and selling decisions.
Throughout this unit, you are required to develop an understanding of the nature of risk, return and shareholder value. In so doing this, you begin to build a picture of the interaction of these fundamental concepts within a corporate environment.
You are led through the fundamental decisions that financial managers make, namely that of corporate investment, financing and dividends before going on to explore other attributes of corporate financial activity such as risk management, mergers and acquisitions and the management of corporate bankruptcy. Merger and acquisition activity has played an increasingly prominent role in corporate finance and this is explored by critically appraising some of the largest and most costly investment decisions in corporate history.
Aims
The aims of this unit are such that you should be able to: Develop an appreciation for the wide and varied
ramifications of corporate decision making through the use of case study analysis.
Derive the links at both an intellectual and practical level that show how the behaviour of financial managers has an impact on the stock market. Appreciate the extent to which shareholders are
rational in understanding and responding to the signals that the corporate world sends.
Through the analysis of case studies, carry out and implement effective, shareholder maximising strategies that reduce investor risk exposure.
Core Learning Outcomes
Learning Outcomes
On completion of this unit you should be able to:
Assessment Criteria
To achieve the learning outcome you must demonstrate the ability to:
1
Generate realistic solutions that can be applied to contemporary problems in the area of corporate finance.
Debate the relationship between firm value and Capital Structure using illustrations to support your arguments and solutions.
2
Provide a critique of the different models that are applicable in this discipline.
Solve the problem of bankruptcy costs and relate your solution to firms in the current economic climate.
3
Examine the signals and anticipate the impact of corporate behaviour on the financial markets.
Assess the impact of company announcements on stock price and then reflect on how wealth could be further enhanced by manipulating the timing of such announcements.
4
Evaluate the different approaches to the management of risk in the corporate world.
Generate different risk hedging strategies using published Option prices and provide detailed recommendations using Option Put Call Profit illustrations that would benefit clients.
5
Critically debate the axiom of shareholder wealth maximisation versus alternative shareholder priorities of ethics and environmentalism.
Synthesises different aspects of a company’s experiences in relation to shareholder wealth under the limitations of competing management and shareholder priorities.
SECTION 2 - Any changes made to Section 2 of the UIF will normally require Faculty level approval
Period of Delivery
Pre-requisites/Restrictions
Student Activity
(10 notional learning hours = 1 credit)
Activity Notional Learning Hours
Lectures 24 Seminars/tutorials Lab/Field work 24 Workshops Rehearsals Assessment 12 E – Learning Self-directed study 90 Group work Other (specify) Total 150 Approach to Learning
You will be required to attend a 2 hour lecture/workshop where they will be expected to cover some of the academic materials as well as the theoretical framework before going on to read case studies and apply the theory to the practice. You will have breakout sessions whereby they discuss the
ideas presented in case studies and then critically debate the transferability of the lessons to the case in hand.
Skills Development
Communication
To help with the development of this you will present your ideas to the remainder of the cohort.
Information Literacy
To help with the development of this you will be able to source and identify the relevant information required in the financial press.
Research and Evaluation
To help with the development of this you will identify and extract the required information such that you are able to utilise it for analysis of the problem at hand.
Creativity and Critical Thinking
To help with the development of this you will develop the most appropriate models that can be utilised in order to apply them to the most conducive scenarios.
Assessment Strategy
This unit has two assessment points. The first assessment is an in-class test that is scheduled around the middle of the teaching schedule. The in-class test will require you to be able to apply the theoretical knowledge that they have attained from their studies to data on a specific company that is pre-selected for them. There is a final assignment submission whereby you are required to sit a 2 hour closed book examination based on both the numerical and theoretical aspects of Corporate Finance.
No Assessment Method* Description of Assessment Method Weight % Learning Outcomes Assessed Submission week (assignments) or length (exam) 1 2 3 4 5
1 IT In Unit Test 30% √ √ √ √ Approximately Week 6
2 EX Examination 70% √ √ √ √ √ Week 14-15
*The following codes for assessment methods apply:-
AR Artefact PC Practical
CB Computer Based PF Performance
CS Case Study PL Placement
DI Dissertation or Project PO Portfolio
EX Exam PR Presentation
GR Group Report RE Individual Report
IT In- Unit Test OR Oral
LR Literature Review OT Other
SECTION 3 - Once initial approval of the unit has been given, the Unit Co-ordinator may make changes to this section, following appropriate consultation
Outline Teaching Schedule Part One
Money Measurement and Global Philanthropy Measures Of Shareholder Wealth
Dividend Policy Capital Structure
Mergers and Acquisitions Class Test Part Two Agency Theory Risk Management Portfolio Theory Options Trading Market Efficiency
End Of Term Examination Recommended Resources Essential
Sangray, Sudesh. Case Studies In Corporate Finance, Cambridge Publishing. Volume 1. ISBN 978-0956801401
Recommended Reading
Brealey, R. Myers, S & Allen, F., 2007. Principles of Corporate Finance with S&P bind-in Card. 9th ed. McGraw- Hill International Edition. ISBN 9780071266758.
Allen, F. and R. Michaely ‘Dividend Policy’ in Jarrow, Maksimovic and Ziemba (eds) Handbook of Finance. (Elsevier Science, 1995).[No ISBN available].
Haugen, R. and J. Lakonishok The incredible January effect. (Homewood, Ill.: Dow Jones- Irwin, 2008) [ISBN 9781556230424].
Ravenscraft, D. and F. Scherer Mergers, Selloffs, and Economic Efficiency. (Washington D.C.: Brookings Institution, 1987) [ISBN 9780815773481
SECTION 4 – Administrative Information
Faculty Business School
Field MSc Business & Management
MSc International Business Management Department/School/Division Division of Accounting & Finance
Unit Co-ordinator Arthur Dyirakamunda
Version Number
Body approving this version FTQSC Date of University approval of this
Shared Units – Indicate below all courses which include this Unit in their diet MSc Finance & Business
MSc International Business Management MSc Business and Management
Form completed by:
Name: Dr. Sudesh Sangray Date: ………
Authorisation on behalf of the Faculty Teaching Quality and Standards Committee (FTQSC)
Chair: ……… Date: …..……….
Unit Updates Date