BAM6222 - Corporate Financial Strategy

Objectives:

On successful completion of the module, students will be able to:

1 use appropriate ratios to assess the performance of a company and to identify possible financial distress;
2 evaluate and discuss dividend policy theory and assess a company’s dividend policy;
3 apply and evaluate investment appraisal techniques. Use appropriate techniques to identify the optimal investment with and without capital rationing;
4 calculate an appropriate cost of capital for an organisation to use with discounted cash flow techniques;
5 apply a number of valuation methods to provide a range of possible values for assets and companies;

Content:

Ratio analysis, creative accounting, reasons for company failure and corporate distress. Corporate dividend policy. Investment appraisal and capital rationing techniques, payback, ARR, NPV, IRR and PI. Cost of capital, DVM, CAPM, debt, taxation and WACC. Optimal capital structures, traditional and modern views. Asset and company valuation techniques. Issuing new equity, offer of sale, rights, tender, and bonus issues. Issuing new debt, bank loans, debentures, bonds and convertible loan stock. UK and global banking system, role of a central bank, investment banks, clearing banks. Other sources of finance, venture capital, grants, debtor factoring, invoice discounting and working capital management.

Learning and Teaching Information:

The module will be delivered via a series of weekly one-hour whole-group interactive lectures supported by weekly one-hour small group tutorial / workshop sessions. Questions / exercises will be set at each lecture meeting for students to complete before the associated small group session. Students will be provided with, and/or directed to, relevant reading and additional questions / exercises to support their progress through the module material. Additional workshop time will be provided for students needing extra practice with a computer spreadsheet.

Lecture / workshop session
Contact hours
Number of groups: 40 1 group of 30 students

Assessment:

001 Portfolio of up to 3 tests and exercises 1 x 2500 word equiv 50%
002 Unseen examination 1 x 2 hours 50%


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