Learning objectives
Upon successful completion of the module, students will be expected to have developed the following learning outcomes and competences.
Knowledge and understanding:
- understand, describe and explain in a formal way the interactions between investments and the risk-reducing properties of portfolios;
- show an awareness of the empirical evidence relating to the CAPM;
- have a firm grasp of the variety of methods of raising finance by selling shares and understand a number of the technical issues involved;
- describe, compare and contrast the different short-term and long-term debt instruments;
- describe the key drivers of value and the actions to increasing value, pointing out advantages and problems in practical use of different value metrics;
- explain the relevance of some important, but often non-quantifiable, influences on the optimal gearing level question;
- describe the influence of particular dividend policies;
- explain the nature of options and the distinction between different kinds of options, and demonstrate their application in a wide variety of areas.
Application of knowledge and understanding:
- identify efficient portfolios and apply utility theory to obtain optimum portfolios;
- measuring beta;
- measuring the market risk of bonds of different maturities;
- map business activities in terms of industry attractiveness, competitive advantage within the industry and life-cycle stage and make capital allocation choices;
- calculate the weighted average cost of capital (WACC) for a company;
- measuring capital and income gearing, together with interest cover;
- Outline a dividend policy for a typical fast-growth and high-investment firm;
- compute the intrinsic and time value on various options.
Making judgement
- developing a “critical thinking” approach to financial models in order to delimit their applicability domain;
- ability to consolidate a judgmental autonomy in order to improve awareness of advantages and drawback of different sourcing and investment techniques.
Communication:
- ability to communicate information, ideas, problems and solutions in the field of financial analysis in both written and oral form.
Learning skills:
-developing the learning skills needed to undertake subsequent advanced training in corporate valuation and investment banking.
- developing specific learning skills through a "Problem-Solving Learning" approach in problem solving and discussion of integrative cases.