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Department of Financial & Management Studies (DeFiMS)

Corporate finance and financial accounting

Course Code:
151030006
Unit value:
0.5
Year of study:
Year 2
Taught in:
Term 2
This course provides an introduction to key concepts in corporate finance and financial accounting. Students will gain an understanding of the system of corporate finance, including an analysis of equity finance, bonds and other debt instruments and how these may be used to finance investment. The syllabus will build on concepts explored in the Introduction to Accounting module to deepen students’ knowledge of project evaluation, investment appraisal and the use of financial information and analysis in corporate decision-making. The syllabus also covers portfolio theory, dividend policy, mergers and acquisitions, international investment decisions and regulation of the financial system. Empirical applications will be emphasised throughout.

Objectives and learning outcomes of the course

At the end of this course students should be able to:

  • Understand the roles of risk and return in corporate finance and  the distinction between risk and uncertainty;
  • Measure and value capital, including fixed capital (gross and net), working capital and intangibles;
  • Understand the cost of debt and equity capital and the advantages and disadvantages of different types of capital finance;
  • Understand portfolio theory;
  • Carry out investment appraisal using different techniques and will be aware of the advantages and disadvantages of different methods;
  • Demonstrate a working knowledge of consolidation of accounts and international investment;
  • Demonstrate knowledge of risk management techniques and disclosure requirements;
  • Understand the rationale for mergers and acquisitions and knowledge of the empirical evidence;
  • Demonstrate knowledge of the regulation of the financial system;

Method of assessment

This course is assessed by 30% written coursework and 70% by one two hour examination

Suggested reading

Core textbooks:
  • Watson, D. and Head, A. (2009) Corporate Finance Principles and Practice, Pearson.
  • Alexander, D. and Nobes, C. (2010) Financial Accounting: An International Introduction, FT Press.
Recommended reading:
  • Arnold, G. (2009) The Financial Times Guide to Investing, Pearson.
  • Brealey, R. and Myers, S. (2010) Principles of Corporate Finance—Global Edition, McGraw-Hill.
  • Das, S. (2012) Extreme Money: The Masters of the Universe and the Cult of Risk, Pearson.
  • Perks, R. and Leiwy, D. (2010) Accounting: Understanding & Practice, McGraw-Hill.
  • Nofsinger, K., Kim, J.R. and Mohr, D.J. (2010) Corporate Governance, International Edition, Pearson.
  • Rice, A. (2011) Accounts Demystified: The Astonishingly Simple Guide To Accounting, Pearson.
  • Watson, D. and Head, A. (2011) Corporate Finance Passnotes, Pearson.