Business Finance

Module code: ECN604

The aims of the module is to equip you with an understanding of the overarching principles of Business Finance.

To provide you with a deeper understanding of the financial decisions faced by firms with particular reference to the time value of money, share prices and equity markets, management of foreign exchange exposure using financial derivatives, methods of internationalizing firms’ capital structure, and associated theoretical and empirical issues.

This is a core module for:

Learning objectives

The intended learning outcomes are that by the end of the module you should be able to understand:

  • the role and goal of financial management;
  • the relationship between the financial policy and the firm’s ability to finance new investments and thereby grow;
  • the main financial statements that are produced by corporations and some common ratios;
  • how to apply the concept of the time value of money to solve financial problems;
  • bond values, yields and ratings, what they mean and why they fluctuate;
  • how exchange rate changes can systematically affect the value of the firm;
  • how to manage the three types of foreign exchange exposure (economic, transaction and translation exposure);
  • how to determine the firm’s overall cost of capital.

Syllabus

  1. Introduction: The Business Finance Environment
  2. Financial Statement Analysis and Modelling
  3. Time Value of Money
  4. Bonds and Stocks Valuation
  5. Future and Options
  6. Management of Economic Exposure
  7. Management of Transaction Exposure
  8. Management of Translation Exposure
  9. International Capital Structure and the Cost of Capital

Note that the schedule of topics may be altered.

Teaching methods

Ten two-hour lectures and four one-hour workshops.

Assessment

The assessment of this module will be unseen exam (100%). The exam will be three hours.

Basic reading

We advise you not to buy books before the module begins, as the reading list may change. If you wish to read in advance, look for these texts in the University library

The following textbooks can be used as background reading:

Eun, C. and Resnick, B., 2014. International Financial Management, 7rd Edition, McGraw-Hill.

Hillier, D. and Clacher, I., 2011. Fundamentals of Corporate Finance: European Edition, 1st Edition, McGraw Hill.

Prerequisites None. But knowledge of advanced economics at undergraduate level is required.

Module leader Dr Georgios Efthyvoulou

Please note that the leader may change before the module begins

Semester Spring

Credits 15