An introduction to the analytical approaches corporate managers use in making financial decisions to maximise firm value. The theory and application of fundamental concepts of time value of money, the relationship between risk and return (i.e., CAPM), portfolio theory of investment (i.e., diversification), and capital structure are examined in detail. You will apply these concepts and assorted financial tools to value stocks and bonds, estimate the cost of capital and implement the discounted cash flow technique to make capital budgeting decisions. You will also demonstrate competence with Bloomberg Market Concepts.
- Explain the key issues faced by corporate financial managers and the analytical approaches required to resolve these issues to maximise firm value.
- Apply time value of money concepts using spreadsheets, formulae and financial calculators to value bonds and common stocks.
- Explain the risk/return trade-off using examples from Portfolio Theory, the Capital Asset Pricing Model and the relationship between a firm and the capital markets.
- Demonstrate competence using Bloomberg Market Concepts.
- Apply concepts of cash flow analysis, evaluation techniques and the cost of capital to make a sound capital budgeting decision.
- Demonstrate the ability to produce a written report that demonstrates higher order understanding of key concepts in managerial finance.
Assumed knowledge is the minimum level of knowledge of a subject area that students are assumed to have acquired through previous study. It is the responsibility of students to ensure they meet the assumed knowledge expectations of the subject. Students who do not possess this prior knowledge are strongly recommended against enrolling and do so at their own risk. No concessions will be made for students’ lack of prior knowledge.
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