| Short Title: | Corporate Finance 2 |
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| Full Title: | Corporate Finance 2 |
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| 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.
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| Learning Outcomes: |
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| On successful completion of this module the learner will be able to | - 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.
- 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.
- 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.
- 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.
- Identify and evaluate the capital structure policy of organizations and critique the current theories and real world practices in this area.
- 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
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Module Content & Assessment| Content |
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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
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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 | 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 | | 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
| | Required Article/Paper Resources |
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- Financial Times n/a
- Sunday Business Post n/a
| | Recommended Article/Paper Resources |
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- 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 |
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- 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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