Corporate Finance

This module addresses issues relating to the financing of private and public companies. Corporate Finance links accounting to financing by evaluating both the asset and liabilities sides of the balance sheet. In line with this, this module starts with a gentle examination of the four fundamental decisions of a financial manager - capital structure, investing, liquidity and dividend decisions. A detailed examination of each of the decisions follows with emphasis on sources of finance, the evaluation of investment projects, working capital management as well as the risk and return associated with corporate financing and investing. The module takes a mathematical approach and therefore aims to build the analytical skills of students.

Objectives and learning outcomes of the module

On successful completion of this module a student will be able to:

• State and discuss the main functions of a financial manager
• Appreciate the concept of time value of money and its applications to corporate finance decisions, including investment decision
• Evaluate the different sources of finance available to a firm
• Appreciate the concept of cost of capital and perform necessary calculations to obtain the cost of capital of a firm
• Appreciate the concepts of risk and returns and the trade-off between them
• Discuss capital asset pricing model and its applications in portfolio theory and cost of equity calculations
• Understand the nature, elements, importance and management of working capital including the determination of working capital needs and funding strategies
• Understand the need for financial planning and prepare simple financial planning models
• Apply corporate finance techniques to corporate actions such mergers and acquisitions

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