UCL School of Management

Module Fact Sheet

MSIN0001: Corporate Finance

Level
Masters, level 7
Prerequisites
Some prior accounting, economics or general business studies may be helpful, but is NOT required
Eligibility
MSc Management Route B students only
Terms
Term 1
Delivery method
2-hour lecture (x 10 wks) immediately followed by 1-hour workshops (x 9 wks)
Assessment
Essay 50%, Final Unseen Examination (2 hours) 50%
Previous Module Code
MSING027

Course overview

This module is offered in the first (Autumn) term only. The module sets out to eduacte students for roles as financially-knowledgeable managers and analysts involved or interacting with orgainsiations, and finance directors and teams. After establishing the role of the finance function and identifying the time value of money and the relationship between risk and return as key concepts, the module goes further to consider a range of important areas within corporate finance. These include: the nature of shareholder value, capital markets, sources of finance, investment appraisal (CAPEX), portfolio theory (including the capital asset pricing model - CAPM), the cost of capital and the impact on capital structure, dividend policy and business valuation (especially in the context of mergers and takeovers). 

Learning outcomes

Upon successful completion of the module, students will:

  • Understand what “maximising shareholder value” actually means, comprehend the alternative leading methods for measuring project values and company worth

  • Comprehend how to ensure that the company has sufficient cash to operate (and where to get it from)

  • Learn how to deal with the advantages of effective leverage as it relates to capital structure.

  • Apply advanced multiple-tier capital investment analysis

  • Calibrate company financing strategy with corporate strategy and future prospects

  • Separate fact versus fiction regarding: buy-backs, extraordinary dividends, cost cuts, corporate tax minimisation

Topics covered

  • Corporate valuation principles, leading methods, particularly two-stage DCF method (DCF2S)

  • Liquidity management

  • The two sides of leverage

  • Optimal capital structure

  • Engines of corporate value: internal (CAPEX), external investment

  • Integration of financing plan with overall business plan

  • Financing planning, sources

  • Dividends and buy-backs

  • International tax strategy, basics of relationship with auditors

Assessment summary

Essay 50%, Final Unseen Examination (2 hours) 50%

Current students should refer to Moodle for specific details of the current year’s assessment.

Essential reading

Corporate Finance by Denzil Watson and Anthony Head, 7th Edition, published by Pearson.

ISBN: 978-1-292-10303-7 (print)

or ISBN: 978-1-292-10308-2 (pdf)

0r ISBN: 978-1-292-14424-5 (ePub)

Past versions of this module

MSING027 17/18

MSING027 16/17

Last updated Monday, 1 October 2018