Module Information

Module Identifier
MMM7620
Module Title
Investments, Corporate Finance and Financial Markets
Academic Year
2015/2016
Co-ordinator
Semester
Semester 2
External Examiners
  • Dr Georgios Katechos (Senior Lecturer - University of Hertfordshire)
 
Other Staff

Course Delivery

Delivery Type Delivery length / details
Seminar 11 x 1 Hour Seminars
Practical 14 x 1 Hour Practicals
Lecture 22 x 2 Hour Lectures
 

Assessment

Assessment Type Assessment length / details Proportion
Semester Assessment 3,000 word essay  30%
Semester Exam 3 Hours   70%
Supplementary Assessment Repeat failed elements or equivalent  30%
Supplementary Exam 3 Hours   Repeat failed elements or equivalent  70%

Learning Outcomes

On successful completion of this module students should be able to:

List, describe, explain, compare and contrast different elements in:

  • Finance context
  • Investment analysis
  • Corporate finance
  • Financial markets, institutions and instruments
  • Risk management and hedging

Interpret corporate financial and market-based information

Cite, explain, appropriately select and apply formulae/techniques to

  • Asset valuation
  • Investment analysis
  • Corporate financing decisions

Integrate different forms of analysis in order to generate a well-reasoned and holistic assessment of an organization'r financial structure and market position

Brief description

This module aims to give students a well-informed, practical grasp of investment analysis and corporate finance; a sound understanding of financial markets; and the foundation to understand contemporary issues in finance. Albeit informed by theory, the module is focused on application and practice. It brings together key topics in: portfolio and asset pricing theories; capital structure, dividend and leasing policy; and financial markets, institutions and instruments.

The over-riding concern is that students should be able to speak the language of finance; be able to take an active and constructive part in discussions of or based on financial and market information; and be able to understand important elements of finance theory and their application in practice.

Underlying themes for the module are the need for interpretation as well as raw analysis; relating theory to practice; appreciation of uncertainty and risk; and creation of value.

Content

1. Introductory topics
  • Wealth objectives of investors and firms
  • Agency theory and governance
  • The estimation of appropriate discount rates for project appraisal
  • Application of spreadsheet modeling for investment decisions
2. Portfolio theory
  • Risk and return paradigm, dominance, mean-variance efficiency and diversification
  • Markowitz frontier
  • The risk free asset
  • Capital market line
3. Asset pricing models
  • Capital asset pricing model
  • Systematic versus non-systematic risk; further diversification
  • Security market line
  • Fama-French 3-factor model
  • Arbitrage pricing theory
4. Capital structure, dividends and leasing policy
  • Pecking order theory
  • Modigliani-Miller'r approach
  • Impact of bankruptcy costs, and agency and signaling effects
  • Traditional theory
  • Dividend policy
  • Leasing policy
5. Financial markets and institutions
  • Major components of a financial system
  • Market purposes and mechanisms
  • Market institutions ? roles and regulation
  • Financial intermediation and transformations
  • The market in corporate restructuring: mergers and acquisitions
  • Risk and risk-bearing
  • Market efficiency
6. Financial instruments
  • Shares versus bonds
  • Financial derivative instruments
7. Market behavior and anomalies
  • Rational learning
  • Herding
  • Momentum versus value
  • Response to corporate/market news

Module Skills

Skills Type Skills details
Application of Number • Develop an easy familiarity with numerical data sources and numerical data • Apply numerical data to problem solving with care and accuracy • Assess the reasonableness of and interpret numerical solutions • Support assertions/arguments with appropriately developed and presented numerical data
Communication • Develop confidence in and clarity of oral communication via tutorial participation • Develop clarity and focus of written communication via: o project production o development of answers to self study questions • Develop and use appropriate subject-specific vocabulary in oral and written communication
Improving own Learning and Performance • Identify and distil the key issues covered by lectures, tutorials and self study • Identify and use a range of learning resources • Investigate benefits of small group working on self study • Structure study to accommodate intensive learning
Information Technology • Use a variety of electronic web- and library-based resources to review available information and retrieve pertinent information • Use various software packages for the production of the project report (text, numerical tables and analysis, graphics) • Use software to complete elements of the self study (e.g., spreadsheets for ease of tabulated numerical calculations, production of summary statistics, production of graphs, etc.)
Personal Development and Career planning • Develop skills in investment and financial analysis and decision making which are essential to the aspiring general manager • Identify a variety of potential career routes within the financial and professional services sector
Problem solving • Identify the precise problem to be solved • Assess which data are pertinent to the problem • Recognize that alternative solution methods might be available • Select and apply appropriate methods for solving the problem • Assess the reasonableness of problem solutions and interpret those solutions
Research skills • Identify which information sources are available to: o facilitate module study (understanding, wider reading) o provide information to facilitate the analysis of financial structure and market position o provide raw input to the production of the project • Select the most pertinent information for retrieval • Retrieve information • Re-assess the pertinence and assess the credibility of retrieved information • Properly reference/attribute information sources
Subject Specific Skills • Identify and use sources of financial information • Understand, analyze, interpret and synthesize between corporate and market-based financial information • Make well-based financial recommendations and decisions • Bring financial analysis and decision making skills to the service of the business – in strategizing, marketing, operating, etc.
Team work

Notes

This module is at CQFW Level 7