Corporate Finance

Module title	Corporate Finance
Module code	BEA2018
Academic year	2024/5
Credits	15
Module staff	Professor Bill Peng (Convenor)

Duration: Term	1	2	3
Duration: Weeks	11

Module description

Summary:

Note: cannot be taken with BEE3059 Asset Pricing or BEA3008 Finance for Managers

This module provides a thorough treatment, grounded in the academic literature and pertinent for the practitioner, of the following key financial questions which are faced by the directors and managers of firms – in which projects should the firm invest; how should this investment be financed; and how should the financial relationship with providers of finance be managed?

Additional Information:

Internationalisation

The content of this module takes an international perspective, particularly when considering the financial market, financing and investing decisions.

External Engagement

This module content meets the standards and is accredited by major accreditation bodies, including the ACCA, ICAEW, ICAS and CIMA

Employability

Students acquire knowledge in this module, including a solid understanding of basic financial theory, which is highly relevant to jobs related to finance and accountancy. This module also offers an opportunity to develop their numeracy and logical thinking skills.

Sustainability

All of the resources for this course are available on the ELE (Exeter Learning Environment).

Module aims - intentions of the module

This module is designed to introduce students to corporate finance theory and enable them to apply it to main problems faced by financial managers and corporate decision makers. In particular, this module provides a thorough treatment of the key aspects in the financial decision-making process in a corporation, including project appraisal under uncertainty, cost of capital, source of finance, capital structure, dividend policy and working capital management.

Intended Learning Outcomes (ILOs)

ILO: Module-specific skills

On successfully completing the module you will be able to...

1. describe, illustrate and compare alternative capital project appraisal techniques;
2. derive models for capital budgeting under uncertainty;
3. explain short term source of finance and derive models for working capital management;
4. describe the long-term source of finance;
5. calculate the costs of equity and debt capital;
6. explain the capital structure debate; derive and apply relevant models to solve problems in capital structure;
7. explain factors that influence a firms dividend policy.

ILO: Discipline-specific skills

On successfully completing the module you will be able to...

8. interpret financial data in the light of established theories;
9. apply and criticise finance models in a real world context;
10. develop theoretical arguments based on analytical reasoning.

ILO: Personal and key skills

On successfully completing the module you will be able to...

11. use information technology for information retrieval and numerical analysis;
12. develop teamwork and presentation skills in debating discussion topics and producing team solutions to problems;
13. work independently as well as in groups, and develop effective and efficient self-study techniques.

Syllabus plan

Introductory topics

Time value of money
Advanced capital investment decisions
Short-term financing and working capital management
Long-term source of finance: debt and equity
Cost of capital
Capital structure: M&M theories
Capital structure: alternative views
Dividend policy
Review session

Learning activities and teaching methods (given in hours of study time)

Scheduled Learning and Teaching Activities	Guided independent study	Placement / study abroad
42	108	0

Details of learning activities and teaching methods

Category	Hours of study time	Description
Scheduled Learning and Teaching Activity	22	Lectures
Scheduled Learning and Teaching Activity	10	Tutorials
Scheduled Learning and Teaching Activity	10	Seminars
Guided Independent Study	108	Reading, research, reflection; Preparation for lectures, tutorials, seminars; Preparation for assessments.

Formative assessment

Form of assessment	Size of the assessment (eg length / duration)	ILOs assessed	Feedback method
Assigned work for each tutorial	3 hrs preparation by student / 1 hr in-class discussion	1-13	Suggested solutions
Mid-term Mock Exam	1 hour in-class	1, 2, 8-10	Suggested solutions and individual feedback meetings

Summative assessment (% of credit)

Coursework	Written exams	Practical exams
0	100	0

Details of summative assessment

Form of assessment	% of credit	Size of the assessment (eg length / duration)	ILOs assessed	Feedback method
In class test	20	1 hour	1-5, 8-13	Suggested solutions; Students be offered opportunity to view scripts; Students who failed to pass will be invited for dedicated help sessions
Final exam	80	2 hours	1-13	Suggested solutions; Students will be offered opportunity to view scripts

Details of re-assessment (where required by referral or deferral)

Original form of assessment	Form of re-assessment	ILOs re-assessed	Timescale for re-assessment
In class test (20%)	Individual assignment (2,000 words, 20%)	1-5, 8-13	August/September Reassessment Period
Final exam (80%)	Examination (2 hours, 80%)	1-13	August/September Reassessment Period

Re-assessment notes

Should a re-assessment of the in class test be required for this module, it will be by means of an alternative individual assignment

Indicative learning resources - Basic reading

The module's main recommended texts are:

Lumby, S., & Jones, C. (2019). Corporate finance: Theory and practice (10^th ed.). Andover: Cengage Learning.
Brealey, R., Myers, S. & Allen, F. (2020). Principles of corporate finance (13^th ed.). Maidenhead: McGraw-Hill Education.
Hillier, D., Ross, S., Westfield, R., Jaffe, J., & Jordan, B. (2020). Corporate finance (4^th European ed.). Maidenhead: McGraw-Hill Education.

For wider reading, there are a large number of texts upon the subject areas of this module. Titles such as‘Financial Management’, ‘Finance’, ‘Corporate Finance’, ‘Investments’, ‘Investment Analysis’ and similar may be found in the library and through any good book seller. Having the most up-to-date edition of such books is rarely important.

Indicative learning resources - Web based and electronic resources

ELE

https://vle.exeter.ac.uk/course/view.php?id=3873

www.ft.com

www.uk.yahoo.com/finance

Indicative learning resources - Other resources

Other materials/sources which you are expected to access/use will be apprised to you during the module.

Key words search

Corporate Finance, Financial Management, Capital Budgeting, Source of Finance, Capital Structure, Dividend Policy

Credit value	15
Module ECTS	7.5
Module pre-requisites	BEA1010
Module co-requisites	Cannot be taken with BEE3059 or BEA3008
NQF level (module)	5
Available as distance learning?	Yes
Origin date	01/09/2011
Last revision date	03/02/2021