Module ASB-3210:
Advanced Corporate Finance

Module Facts

Run by Bangor Business School

20 Credits or 10 ECTS Credits

Semester 1 & 2

Organiser: Mr Ayan Orujov

Overall aims and purpose

To advance knowledge and understanding of corporate finance, with particular emphasis on corporate governance and options.

Course content

The module examines the theory and practice of corporate investment and financial decisions. Topics include: mean-variance analysis, option pricing, capital structure, dividend policy, efficient capital markets, agency theory, mergers and restructuring. Particular emphasis will be placed on topical areas within corporate governance and investments.

Assessment Criteria

threshold

Demonstration of the required knowledge and techniques but with significant mistakes and little development of the subject beyond lecture material.

good

Clear understanding of the subject, together with evidence of investigation and understanding of the research literature, but with some theoretical or practical minor errors.

excellent

Excellent grasp of the concepts and techniques together with significant evidence of engagement and understanding of the research papers in this area.

Learning outcomes

  1. Demonstrate knowledge and awareness of corporate finance issues by examining both empirical and theoretical research.

  2. Apply insights from corporate finance theory through case studies.

Assessment Methods

Type Name Description Weight
Group Report 20
3hr Exam S2 80

Teaching and Learning Strategy

Hours
Lecture

Two 1-hour lectures per week for 9 weeks each semester (including revision).

36
Tutorial

One 1-hour tutorial per fortnight. 10 tutorials per student in total.

10
Private study

preparation and revision

154

Transferable skills

  • Literacy - Proficiency in reading and writing through a variety of media
  • Numeracy - Proficiency in using numbers at appropriate levels of accuracy
  • Computer Literacy - Proficiency in using a varied range of computer software
  • Self-Management - Able to work unsupervised in an efficient, punctual and structured manner. To examine the outcomes of tasks and events, and judge levels of quality and importance
  • Exploring - Able to investigate, research and consider alternatives
  • Information retrieval - Able to access different and multiple sources of information
  • Inter-personal - Able to question, actively listen, examine given answers and interact sensitevely with others
  • Critical analysis & Problem Solving - Able to deconstruct and analyse problems or complex situations. To find solutions to problems through analyses and exploration of all possibilities using appropriate methods, rescources and creativity.
  • Teamwork - Able to constructively cooperate with others on a common task, and/or be part of a day-to-day working team
  • Argument - Able to put forward, debate and justify an opinion or a course of action, with an individual or in a wider group setting

Subject specific skills

  • knowledge of theories and empirical evidence concerning financial management, risk and the operation of capital markets (in cases of degrees with significant finance content).
  • An appreciation of the nature of the contexts in which finance can be seen as operating, including knowledge of the institutional framework necessary for understanding the role, operation and function of markets and financial institutions (e.g. the economic, legal, regulatory and tax environment, both national and international; the firm; the capital markets and the public sector).
  • A knowledge of the major theoretical tools and theories of finance, and their relevance and application to theoretical and practical problems (e.g. concept of arbitrage and examples of its use; financial mathematics and capital budgeting criteria; informational efficiency; optimal risk sharing; portfolio theory; asset pricing models and the valuation of securities; cost of capital; derivative pricing; risk management; information asymmetry; principal agency relationships; signalling; Fisher separation and capital budgeting criteria; behavioural finance; term structure and the movement of interest rates; determination of exchange rates and financial intermediation).
  • An ability to interpret financial data including that arising in the context of the firm or household from accounting statements and data generated in financial markets. The interpretation may involve analysis using statistical and financial functions and procedures such as are routinely available in spreadsheets (eg Microsoft Excel) and statistical packages. It may assume the skills necessary to manipulate financial data and carry out statistical and econometric tests (e.g. estimation and interpretation of asset pricing models; financial modelling and projections; event studies and residuals analysis; elements of time series analysis, such as serial correlation mean reversion, and stochastic volatility).
  • An understanding of the relationship between financial theory and empirical testing, and application of this knowledge to the appraisal of the empirical evidence in at least one major theoretical area. The appraisal should involve some recognition of the limitation and evolution of empirical tests and theory (eg the efficient markets hypothesis; anomalies; pricing of derivatives and other securities; bond portfolio management; exchange rates; raising capital and capital structure).
  • An understanding of the financing arrangements and governance structures of business entities, and an appreciation of how theory and evidence can be combined to assess the effectiveness and efficiency of such arrangements (e.g. decisions as to sources of finance and financial structure; the pricing of corporate securities; the market for corporate control; corporate governance structures and mechanisms; financial planning and international dimensions of finance).
  • An understanding of financial service activity in the economy, and an appreciation of how finance theory and evidence can be employed to interpret these services (for example, information asymmetry, adverse selection and moral hazard could be employed to analyse the fundamental nature of services, such as insurance, pensions, bank lending and consumer credit, and also explore fundamental problems arising in such financial service provision. Efficient market hypothesis could be used to explore evidence for fund manager performance and the effectiveness of equity and bond saving services).
  • Problem solving and critical analysis: analysing facts and circumstances to determine the cause of a problem and identifying and selecting appropriate solutions.
  • Numeracy: the use of quantitative skills to manipulate data, evaluate, estimate and model business problems, functions and phenomena.
  • Conceptual and critical thinking, analysis, synthesis and evaluation.
  • Self-management: a readiness to accept responsibility and flexibility, to be resilient, self-starting and appropriately assertive, to plan, organise and manage time.

Pre- and Co-requisite Modules

Pre-requisites:

Courses including this module

Compulsory in courses:

Optional in courses: