AC303-Advanced Business Finance

Module Provider: Business Informatics, Systems and Accounting
Number of credits: 20 [10 ECTS credits]
Level:6
Terms in which taught: Autumn term module
Pre-requisites: AC203 Business Finance
Non-modular pre-requisites:
Co-requisites:
Modules excluded:
Current from: 2023/4

Module Convenor: Dr Dan Zhou
Email: dan.zhou@henley.ac.uk

Type of module:

Summary module description:

The module aims to provide an analytical framework for an understanding of the firm’s major financial decisions by considering the theoretical models that explain these decisions. It develops the knowledge, understanding and skills of financial management introduced in AC203, Business Finance

This module is delivered at University of Reading and Beijing Institute of Technology

Aims:

The module aims to introduce students to key perspectives, theories and practices in Advanced Business Finance by considering inflation and taxation effects on investment appraisal, the effects of capital structure, portfolio analysis, different approaches to business valuation and tools of risk assessment and measurement.

Assessable learning outcomes:

By the end of the module it is expected that students will be able to:

1. Analyse investment projects allowing for inflation and taxation.

2. Discuss the treatment of risk and uncertainty in investment decisions.

3. Identify and appraise the main issues in the capital structure debate. 

4. Estimate the weighted average cost of capital.

5. Explain and appraise the factors influencing dividend policy in theory and in practice.

6. Discuss the valuation of debt and equity and the implications of the efficient market hypothesis.

7. Describe and evaluate approaches to managing risk.

Additional outcomes:

Structured activities are designed to develop independent learning skills. Students are encouraged to develop additional IT skills by use of relevant web resources and communication techniques, including Blackboard.

Outline content:

1. Inflation and taxation effects on investment decisions

2. Capital rationing and replacement decisions

3. Risk and return in investment decisions (advanced investment appraisal).

4. Portfolio theory 

5. Capital asset pricing model 

6. Capital structure and cost of capital

7. Dividend policy

8. Risk management

Brief description of teaching and learning methods:

Lectures of two hours per week will be used for the exposition of the major concepts, principles and techniques under consideration. Workshops of two hours duration will be used for problem solving and discussions based on current issues

Summative assessment- Examinations:

One 2.5 hour closed book unseen written exam in the Summer term.

The examination for this module will require a narrowly defined time window and is likely to be held in a dedicated exam venue.

Summative assessment- Coursework and in-class tests:

Students will complete two in-class time constrained tests, each with a weight of 10% in the final assessment mark. The tests are closed book, previously unseen papers.

The tests will be during weeks 7 and 11 of the Autumn Term.

Formative assessment methods:

There will be practice tests.

Penalties for late submission:

The Module Convenor will apply the following penalties for work submitted late, in accordance with the University policy. 

·  where the piece of work is submitted up to one calendar week after the original deadline (or any formally agreed extension to the deadline): 10% of the total marks available for the piece of work will be deducted from the mark for each working day (or part thereof) following the deadline up to a total of five working days;

·  where the piece of work is submitted more than five working days after the original deadline (or any formally agreed extension to the deadline): a mark of zero will be recorded.

The University policy statement on penalties for late submission can be found at: http://www.reading.ac.uk/web/FILES/qualitysupport/penaltiesforlatesubmission.pdf

You are strongly advised to ensure that coursework is submitted by the relevant deadline. You should note that it is advisable to submit work in an unfinished state rather than to fail to submit any work.

Assessment requirements for a pass:
A weighted average mark of coursework and examination of 40%.

Reassessment arrangements:
By examination only (one 2.5-hour unseen written paper) in August/September. Coursework will not be included in the re-assessment.

Additional Costs (specified where applicable):

Suggested text books (anyone of these two) 

• £50.99: McLaney, E. J. (2017) Business Finance: Theory and Practice, Harlow: Pearson. ISBN-13: 9781292134406*.
  
  
  
  • *This book is also available electronically from University of Reading library and you need your university username and password to access it online.
  
  
  
  


• Arnold, G. and D.Lewis (2019) Corporate financial management (6th ed.), Harlow : Pearson. 

This book is also available electronically from University of Reading library and you need your university username and password to access it online.

Calculator - Any non-programmable, approximately £15

Last updated: 30 March 2023