ICM251-Corporate Finance

Module Provider: ICMA Centre
Number of credits: 20 [10 ECTS credits]
Level:7
Terms in which taught: Spring term module
Pre-requisites:
Non-modular pre-requisites:
Co-requisites: ICM108 Fixed Income and Equity Investments
Modules excluded:
Current from: 2018/9

Email: g.alexandridis@icmacentre.ac.uk

Type of module:

Summary module description:

This module is delivered at University of Reading and University of Reading Malaysia

The module deals with how corporations are governed and structured, the financing alternatives, structures and processes involved (IPOs, SEOs, Private Equity, Bank Debt and Corporate Bonds), the payout policy of the firm (dividends and repurchases) as well growing through mergers and acquisitions. The module also extensively deals with advanced financial analysis and enterprise valuation methods employed by investment professionals and investment banks.

Aims:

The main aim of the module is to provide a rigorous grounding of the theory and practice of corporate finance and more specifically the long-term managerial decisions associated with investments, financing and payout and how they affect the value of the firm.

Assessable learning outcomes:

By the end of the module, it is expected that the student will be able to: - Identify value increasing corporate governance characteristics - Critically assess the main goals of a corporation, the impact of short-termism and responsible long-term value maximization. - Explain the differences between financing alternatives and the processes involved - Propose and defend a financing strategy for a real firm - Explain optimal capital structure and payout policy in the presence of market imperfections - Understand the pros and cons of different forms of payout - Critically discuss the motives and financing methods for mergers and acquisitions - Value a real corporation using different valuation methods- Build a comprehensive pitch-book including detailed financial analysis.

Additional outcomes:
The module also aims to encourage teamwork and communication skills via case study methods and group discussion. Students will get exposed to real corporate finance problems and analyse web-based industry and company information.

Outline content:

- Objectives of the Firm, Agency problems and Corp. Governance - Financing Alternatives and Issuing Securities - The Capital Structure Decision - Payout Policy - Mergers and Acquisitions - Advanced Enterprise Valuation and Financial Analysis

Brief description of teaching and learning methods:
Lectures will be used for the exposition of theory. Classes will be used to discuss non-assessed problem sets and case studies. There will be ten 2-hour lectures and five 1.5 hour seminars

Summative assessment- Examinations:
2 hours.

Summative assessment- Coursework and in-class tests:
-A 2 hour mid-term test: 40% of the total final assessment mark
-A 3000 word group project: 60% of the total final assessment mark

Formative assessment methods:

Penalties for late submission:
Penalties for late submission on this module are in accordance with the University policy. Please refer to page 5 of the Postgraduate Guide to Assessment for further information: http://www.reading.ac.uk/internal/exams/student/exa-guidePG.aspx

Assessment requirements for a pass:
A minimum total final mark of 50%.

Reassessment arrangements:
By written test only, as part of the overall examination arrangements for the MSc programme. Re-examination for Part 2 modules takes place in September of the same year.

Additional Costs (specified where applicable):
1) Required text books: Hillier, D. (2013) Corporate Finance, ISBN-13: 978-0077139148, McGraw Hill, £45.
2) Specialist equipment or materials:
3) Specialist clothing, footwear or headgear:
4) Printing and binding:
5) Computers and devices with a particular specification:
6) Travel, accommodation and subsistence:

Last updated: 20 April 2018