| Short Title: | Corporate Finance |
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| Full Title: | Corporate Finance |
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| Description: | This module, in conjunction with Corporate Finance 2, aims to build on the theoretical and practical knowledge gained in Financial Management 1 and 2 and give students an appreciation of the key strategic issues affecting company finance. |
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| Learning Outcomes: |
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| On successful completion of this module the learner will be able to | - Discuss the financial strategy formulation of a business enterprise
- Describe and discuss the role and importance of corporate governance in Irish business.
- Apply and appraise different approaches to the valuation of businesses for merger, takeover or disposal.
- Apply investment appraisal techniques in the context of foreign currencies.
- Explain the importance of portfolio theory in making investment decisions
- Apply and critique the use of Capital Asset Pricing Model in the calculation of company cost of equity and weighted average cost of capital.
- Identify the relevant sources of finance and assess the impact on the capital structure, taking account of the major theories in the area.
- Identify, explain and evaluate corporate finance theories in the context of real-life business issues described in the business press.
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Module Content & Assessment| Content |
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Objectives of organisations (including 'not for profit' organisations) (5%) Corporate and Financial Strategy
Objectives of Business Enterprises
Financial and Non-financial objectives
Objectives of Publicly owned and non-commercial bodies
Financial Management Decisions Corporate governance: (10%) Patterns of Share Ownership
Potential Sources of Conflict
UK and International Corporate Governance
Recent Developments / Current Issues
Corporate Governance in Ireland
Companies Act 2003 Strategy formulation: (10%) Planning Issues
Planning and Strategy
Financial Controls
Growth Strategies
Mergers and Acquisitions
Pricing
Strategic issues in Practice Investment decisions: (15%) NPV and IRR methodologies
Relevant costs and benefits method
Foreign currency project appraisal Valuation of companies and the Valuation of debt: (10%) Company Valuation methodologies
Convertibles and warrants
Valuation of debt
Efficient Market Hypothesis Portfolio theory: (10%) Expected Returns and standard deviations
Correlation and covariance
Investor preferences
Risk free investments
Capital Market Line
Diversification
Practical Application of Portfolio Theory
Problems with Portfolio Theory The capital asset pricing model: (15%) Systematic and unsystematic risk
Beta – meaning and calculation
CAPM formula
Alpha values
Practical problems with CAPM
CAPM and portfolios
Other pricing models
Cost of Capital calculation, using CAPM Cost of capital: (10%) Valuation of Equity using CAPM
Weighted Average Cost of Capital using CAPM Capital structure and advanced valuation techniques: (15%) Financial Risk, gearing and cost of capital
Choosing a Capital Structure
Traditional Theory
Modigliani and Miller without taxation
Modigliani and Miller with taxation
Arbitrage Proofs
Real World influences on Capital Structure
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| Assessment Breakdown | % |
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| Course Work | 30% | | End of Semester Formal Examination | 70% |
| | Outcome addressed | % of total | Assessment Date |
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| Formal End-of-Semester Examination | 1,2,3,4,5,6,7,8 | 70% | Semester End |
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| Coursework Breakdown |
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| Type | Description | Outcome addressed | % of total | Assessment Date |
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| Continuous Assessment | The continuous assessments will be in the form of(a) an in-class time constrained closed book test covering one or more of the learning outcomes; and (b) a short project based on a current issue in the financial press to be presented to peers. | | 30 | n/a |
IT Tallaght reserves the right to alter the nature and timings of assessment Module Workload & Resources| This course has no full time workload. |
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| Resources |
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| Required Book Resources |
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- ACCA Paper 3.7, Strategic Financial Management, (Dec 06 and June07) Ed., BPP Study Text
| | Recommended Book Resources |
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- Arnold, G.,, Corporate Financial Management, Latest Ed.
- Power, O’Meara, Walsh, Financial Management, 1st Ed.
| | Required Article/Paper Resources |
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- Financial Times n/a
- Sunday Business Post n/a
- Accountancy (UK) Journal ICAEW n/a
- Accountancy Ireland Journal ICAI n/a
- Accountancy Age Journal n/a
- Accountancy Plus Journal ICPAI n/a
- Business and Finance Journal n/a
| | Other Resources |
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- www.infotrac.galegroup.com/itweb/tallaght: n/a
- www.accaglobal.com/students/: n/a
- www.cimaglobal.com: n/a
- www.cpaireland.ie: n/a
- www.icai.ie: n/a
- www.icaew.co.uk: n/a
- http://www.businessweek.com/: n/a
- http://www.rte.ie/business/: n/a
- http://news.ft.com/home/europe: n/a
- http://money.cnn.com/markets/news/index.html: n/a
- http://www.smartmoney.com/: n/a
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