Content, progress and pedagogy of the module

This module covers a wide range of applied finance topics such as corporate finance, financial risk and valuation, regulation, ethics and risk management, investment management and others areas of applied finance. The module also takes a practical approach and emphasizes the integration of the finance function within the context of managerial decision-making.

Rather than heavily mathematical the module follows a more descriptive approach when possible. The module covers topics such as: investment decisions and strategies, company analysis and stock valuation, strategic financial decisions, securities valuation, equity portfolio management strategies, market efficiency and anomalies, among others.

Learning objectives

Knowledge

The objective is that the student after the module possesses the necessary knowledge on:

• discounted cash-flow principles and net present value (NPV) techniques to perform successful project appraisals and discuss the basic principles of capital budgeting, including the choice of relevant cash flows.
• how taxes affect the cost of capital from different capital sources and explain how the marginal cost of capital and the investment opportunity schedule are used to determine the optimal capital budget.
• the importance of asset allocation, in terms of the percentage of a portfolio’s return that can be explained by the target asset allocation, and explain how political and economic factors result in differing asset allocations by investors in various countries.

Skills

The objective is that the student after the module possesses the necessary skills in:

• demonstrating a working knowledge of capital budgeting concepts and analysis.
• discussing and critiqueing characteristics and practices related to board and committee independence and determine whether they are supportive of shareholder protection.
• demonstrating a working knowledge of the key elements of the portfolio management process, including the investment setting, investment policy and asset allocation.

Competences

The objective is that the student after the module possesses the necessary competences in:

• applying the information obtained from financial statements in the valuation process and be familiar with corporate governance issues and risks affecting companies.
• applying financial math to value assets with different patterns of cash flows (e.g. stocks and bonds).
• applying the capital market theory effect on expected returns and possible risk-return combinations when a risk-free asset is combined with a portfolio of risky assets.

Type of instruction

For information see § 17.

Exam

Exams