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Applied Financial Management

Module Convenor: Dr Pierre Nadeau, Dr Libon Fung
Assessment: Coursework – 25%, 2,000 to 2,500 words (deadline – 17th November 2011; Absolute Cut-Off deadline – 8th December)
Exam – 75%, 2 hours

Aims

This module aims to cover the basic building blocks of financial management that are of primary concern to corporate managers, and all those considerations needed to make financial decisions both inside and outside the firm.  It builds on the concept of net present value and addresses capital budgeting aspects of investment decisions.  Time value of money is then applied to value financial assets, before extensively considering the relationship between risk and return.  The latter part of the module introduces the theory and practice of financing and dividend decisions.

Learning Objectives

By the end of the course, students should be able to:

  • understand how different financial markets function;
  • estimate the valuation of financial instruments (including stocks and bonds)
  • understand the term structure of interest rates;
  • make capital budgeting decisions under both certainty and uncertainty;
  • appreciate the application of the Capital Assets Pricing Model in practice; and
  • have a working knowledge of the capital structure theory and dividend policy of a firm;

Intellectual

  • to integrate subject matter studied on related modules and to demonstrate the multi-disciplinary aspect of practical financial management problems; and
  • to use academic theory and research to question established financial theories.

Practical

  • to be more proficient in researching materials on the internet and Library database.
  • to be able to use SPSS or excel for statistical analysis.

Personal and Social

  • Through group discussion and case study, students will learn to appreciate public speaking and presentation.

Background Reading

  • Brealey, R. A., Myers, S. C., and Allen, F., ‘Principles of Corporate Finance’, 10th edition, McGraw Hill, 2011, ISBN: 0073530735
  • Overview – Watson, D and Head, A. ‘Corporate Finance – Principles and Practice’, 5th edition, FT Prentice Hall, 2010, ISBN: 978-0-273-72525-1