Run by Bangor Business School

20.000 Credits or 10.000 ECTS Credits

Semester 1 & 2

Organiser: Dr Danial Hemmings

This module, taught alongside ASB2202 Corporate Finance, is available only to 3rd year direct-entry students on BSc Accounting and Banking.

To examine the concepts and principles underlying key financial decisions. To provide an introduction to corporate finance.

Present value and the opportunity cost of capital; Net present value and alternative methods of investment appraisal; Project analysis; Financial planning, and analysing financial performance; Investment risk and return, and portfolio theory; The Capital Asset Pricing Model; Short-term and long-term financing; Estimating the cost of debt and equity; Weighted average cost of capital; Capital structure, and market imperfections; Dividend policy; Finance for Small and Medium-sized Entities (SMEs).

excellent

A- to A+ (70%+): Outstanding Performance. The relevant information accurately deployed. Excellent grasp of theoretical/conceptual/practice elements. Good integration of theory/practice/information in pursuit of the assessed work's objectives. Strong evidence of the use of creative and reflective skills.

threshold

D- to D+ (40-49%): No major omissions or inaccuracies in the deployment of information/skills. Some grasp of theoretical/conceptual/practical elements. Integration of theory/practice/information present intermittently in pursuit of the assessed work's objectives.

good

B- to B+ (60-69%): Very good performance Most of the relevant information accurately deployed. Good grasp of theoretical/conceptual/practical elements. Good integration of theory/practice/information in pursuit of the assessed work's objectives. Evidence of the use of creative and reflective skills.

C- to C+

C- to C+ (50-59%): Much of the relevant information and skills mostly accurately deployed. Adequate grasp of theoretical/conceptual/practical elements. Fair integration of theory/practice/information in the pursuit of the assessed work's objectives. Some evidence of the use of creative and reflective skills.

1. Critically understand the nature and implications of risk and return in corporate finance.

2. Fully understand the portfolio concept in finance, and implications on corporate financing decisions.

3. Apply techniques for financial valuation and rules for capital investment.

4. Appraise financial performance.

5. Critically understand the nature and implications of alternative long-term financing decisions.

Type	Name	Description	Weight
	Semester 1 Online Test		15.00
	Semester 1 Formal Examination 1.5 hours		35.00
	Semester 2 Online Test		15.00
	Semester 2 Formal Examination 1.5 hours		35.00

		Hours
Lecture	One 2-hour lecture per week.	40
Private study	Private study will include time reviewing lecture materials and recommended reading, completing assignments, and revising for the exam.	160

• Literacy - Proficiency in reading and writing through a variety of media
• Numeracy - Proficiency in using numbers at appropriate levels of accuracy
• Information retrieval - Able to access different and multiple sources of information
• Argument - Able to put forward, debate and justify an opinion or a course of action, with an individual or in a wider group setting

• knowledge of theories and empirical evidence concerning financial management, risk and the operation of capital markets (in cases of degrees with significant finance content).
• Analysis, deduction and induction. Economic reasoning is highly deductive, and logical analysis is applied to assumption-based models. However, inductive reasoning is also important. The development of such analytical skills enhances students' problem-solving and decision-making ability.
• 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 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).
• Numeracy: the use of quantitative skills to manipulate data, evaluate, estimate and model business problems, functions and phenomena.
• Self-management: a readiness to accept responsibility and flexibility, to be resilient, self-starting and appropriately assertive, to plan, organise and manage time.

Reading list

Same reading list as ASB-2202: http://readinglists.bangor.ac.uk/modules/asb-2202.html

Core text: R.A. Brealey, S.C. Myers and F. Allen, 'Principles of Corporate Finance', Latest edition, McGraw-Hill International. Second-hand copies of earlier editions of the text are also OK for the course.

Compulsory in courses:

• NN44: BSc Accounting and Banking with International Experience year 4 (BSC/ABIE)
• NN43: BSc Accounting and Banking year 3 (BSC/ACCB)
• NN46: BSc Accounting and Banking (4 year with Incorp Found) year 3 (BSC/ACCB1)
• NN3F: BSc Accounting and Banking year 3 (BSC/ACCBF)
• NN3P: BSc Acc & Banking with Place Yr year 4 (BSC/ACCBP)
• N312: BSc Banking with Financial Tech year 3 (BSC/BKFT)

Optional in courses:

• N107: BA Business year 3 (BA/BUS)