Foundations of Finance
(Michaelmas Term, weeks 4-10)
The module will aim to cover the basic building-blocks of finance that are of primary concern to corporate managers, and all those considerations needed to make financial decisions both inside and outside the firm. Time value of money will be applied to value financial securities, before extensively considering the relationship between risk and return. The latter part of the module will introduce the theory and practice of financing and dividend decisions.
Corporate Finance: Second European Edition by Hillier, Ross, Westerfield, Jaffe and Jordan, 2013, (ISBN: 9780077139148) McGraw-Hill.
- Valuation of financial securities
- Portfolio selection and diversification
- Capital asset pricing model and factor models
- Financing decisions and efficient capital markets
- Capital structure and valuation for the levered firm
- Dividend policy
Coursework 25% of module mark and examination 75% of module mark.
Two one and a half hour classes twice a week for seven weeks.
For those interested in studying to become a Chartered Financial Analyst, it is worth noting that this module contributes to:
- Corporate Finance at CFA levels I and II
- Portfolio Management at CFA levels I, II and III
- Basic Valuation Concepts at CFA level II