Short Title:Corporate Finance 2
Full Title:Corporate Finance 2
Module Code:FNCE H4002
 
NFQ Level:8
 
ECTS Credits:5
Reviewed By:MARTIN NOLAN
Description:Module Aims: This module, aims to build on the theoretical and practical knowledge gained in Corporate Finance 1, Financial Management 1 and 2. Its aim is to provide students with a comprehensive knowledge of the key strategic and management issues affecting company finance.
Learning Outcomes:
On successful completion of this module the learner will be able to
  1. Discuss the motives for mergers along with the financing methods, the merger process and regulatory constraints. Describe the benefits and problems for the stakeholders involved.
  2. Appraise the methods of corporate re-organisations and the alternative methods of financing same. Describe the role played by venture capitalist in such re-organisations.
  3. Demonstrate an understanding of foreign exchange and interest rate risk and their impact on the management of businesses. Devise hedging strategies to counter such risk and make recommendations on strategy.
  4. Demonstrate an understanding of the importance of international financial system and its impact on overseas investment decisions; the raising of capital overseas; the management of multinationals.
  5. Identify and evaluate the capital structure policy of organizations and critique the current theories and real world practices in this area.
  6. Explain the importance of dividend policy to an organisation and to the capital markets. Comment on the theories that link dividend policy, the financial structure and the cost of capital in an organisation
 

Module Content & Assessment

Content (The percentage workload breakdown is inidcative and subject to change)
  • Mergers and Acquisitions: (10%)
    Takeovers Payment methods (cash, shares etc.) Position of shareholders Regulation Post Acquisition integration
  • Corporate Re-organisations: (10%)
    Divestments – de-mergers; sell-offs; spin-offs Management Buy Outs. Role of Venture Capitalist Capital Reconstructions Schemes
  • Foreign Exchange Risk: (35%)
    Introduction and terminologies; rates Risk exposures and risk reduction Managing Transaction risks – invoicing; matching receipts and payments, matching assets and liabilities; netting Forward rates Interest rate parity Predicting future rates Effective cost of FX loans; FX forward contracts; options; closing- out Hedging using Money Markets Forward v Money Market Hedge FX Futures Terminologies; closing out Hedge efficiency Use of futures contracts to hedge FX exposures Interest Rate Risk; Swaps
  • Global Economic Environment: (10%)
    International Financial System Appraisal of overseas investment decisions Raising Capital Overseas Financial Control Within Multinationals Management of International Trade
  • Dividend Policy and Corporate Strategy: (10%)
    Dividend payment sequence Dividend growth model Dividend policy debate Resolutions to the dividend controversy Traditional ‘Bird in hand’ theory M & M Dividend as a residual theory
  • Dividend Policy and Corporate Strategy: (10%)
    Inefficient market aspects: Signalling and Clientele effects Real world dividend policy decision Other issues – scrip dividends, bonus/scrip issues, stock splits, share repurchases, ‘special dividends’.
  • 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
Assessment Breakdown%
Course Work30%
End of Semester Formal Examination70%
 Outcome addressed% of totalAssessment Date
Formal End-of-Semester Examination1,2,3,4,5,670%Semester End
Coursework Breakdown
TypeDescriptionOutcome addressed% of totalAssessment Date
Continuous AssessmentThe continuous assessments will be in the form of30n/a

IT Tallaght reserves the right to alter the nature and timings of assessment

 

Module Workload & Resources

This course has no full time workload.
Resources
Required Book Resources
  • ACCA Paper 3.7, Strategic Financial Management, Dec 06 and June07) Ed., BPP Study Text
Required Article/Paper Resources
  • Financial Times n/a
  • Sunday Business Post n/a
Recommended Article/Paper Resources
  • Arnold, G., (latest Ed) n/a, Corporate Financial Management Arnold, G., (latest Ed)
  • Financial Management n/a, Power, O’Meara, Walsh (1st Ed)
  • Accountancy (UK) Journal ICAEW n/a
  • Accountancy Ireland Journal ICAI n/a
  • Accountancy Age Journal n/a, Accountancy Age Journal
  • Accountancy Plus Journal ICPAI n/a
  • Business and Finance Journal n/a
Other Resources
  • 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