Course Resources Archive

This module supports the student's study of the relationship between financial markets and companies, in particular the principle of shareholder value maximisation, and the implications of this for internal management of companies and business units. It aims to facilitate the acquisition by students of a balance of skills and knowledge including skills in applying quantitative techniques; the ability to interpret and explain the results of these calculations; the ability to critically evaluate the techniques; and the capacity to relate these to the external contexts in which companies operate and in particular the influence of capital markets on corporate behaviour.

Shareholder wealth maximisation and alternative corporate objectives; shareholder value analysis and value-based management; capital market efficiency; portfolio theory; capital asset pricing model; gearing and capital structure; dividend policy; mergers, take-overs and de-mergers; management of working capital; short and long term souces of finance.

i. Knowledge and Understanding
By the end of the module, students should be able to:
a) explain and evaluate arguments for adopting shareholder wealth maximisation as the primary objective of a private-sector company and calculate the achievement of this through a range of complementary methods.
b) explain, evaluate and apply methods of implementing value-based management in the internal management of companies and divisions.
c) evaluate and appraise the working capital management practices of organisations.
d) critically evaluate the Capital Asset Pricing Model in comparison with alternative approaches.
e) explain and critically evaluate dividend theory and the impact of dividend policies on shareholder wealth.
f) appraise the capital structure of organisations with reference to financial and business risk and evaluate sources of long term and short term finance.
g) appraise the motives behind corporate restructuring including take-overs and divestments; evaluate alternative financing methods and their impact on financial performance and shareholder wealth; assess alternative methods of company valuation.

ii. Skills
By the end of the module students should have developed skills in:
Application of numerical techniques: discounted cash flow models, dividend valuation and other company/share valuation techniques.
Problem solving: mini case studies, corporate valuation project
Working with others: group-based assignment
Specific vocational skills: students are involved in the application of financial theories and techniques to a wide range of real companies and practical cases.

Staff/student contact: approximately 20%.
Student directed study: approximately 80%.

The Library Catalogue contains full details of the current reading list for this module. Further details may also be found in the Module Guide.