UCL School of Management

Module Fact Sheet

MSIN3017: Corporate Financial Strategy

Taught by
Level
Advanced
Prerequisites
Some prior accounting, economics or general business studies may be helpful
Eligibility
Y3 IEP finance & accounting minor; 3rd, 4th year undergraduates from all departments; 2nd year Economics; Y3 Mechanical with Business Finance
Terms
Term 1 or Term 2
Delivery method
2-hour lecture (x 10 weeks) and 1-hour workshop (9 weeks)
Assessment
100% final unseen 3-hour examination

Course overview

This module considers a wide range of major strategic financial analyses addressed by companies’ senior financial officers today. FDs and CFOs comprise the largest future source of CEOs of publicly-traded firms. This course, “CFS” is designed to be of interest to numerous groups, including but not limited to: aspiring corporate financial officers, advisors and bankers dealing with CFOs/FDs and general management-oriented students who appreciate that financial & investment strategies aimed at maximising shareholder value are paramount in business decision-making today and into the future.

Focus is on alternative opportunities/threats encountered by the FD/CFO in key areas: working capital management, optimal capital structure, internal and external investment advanced evaluation, financial plan development (both immediate and over the company’s entire financial lifespan), buy back and dividend decisions, use and mis-use of corporate gearing (leverage), internal profit improvement initiatives, financial sourcing, make v buy financial decisions, bankruptcy and basic tax strategy, dividends and share buy-backs, an overview-level introduction to the Capital Asset Pricing Model (CAPM) and Weighed Average Cost of Capital (WACC) analysis, and management of relationships with the investment community.

Learning outcomes

Upon successful completion of the module, students will:

  • Have a practical understanding of the elements comprising the Capital Asset Pricing Model (CAPM) and its application to both debt and equity planning

  • Comprehend issues and trade-offs in sometimes conflicting financial objectives of the firm relating to: liquidity, safety, near-term v future performance, investment funds adequacy and external perceptions of creditworthiness

  • Understand and be proficient at applying an expansive range of optimal capital structure (OCS) alternative approaches depending on company future objectives and circumstances

  • Understand when and how dividend and buy-backs increase corporate value and when they do not

  • Understand both the potential and the dangers associated with primary reliance on high leverage techniques in attempt to increase return on equity & return on investment.

  • Effective use tools such as Competitive Analysis Period (CAP), Corporate Value Lifespan / Five Domain (CVL/5D), Z-Score, others in designing the firm’s financial future.

  • Understanding the differences and consequences of short-term versus continuing profit maximisation financial strategies.

Topics covered

  • Working capital management and tradeoffs

  • Optimal Capital Structure (OCS)

  • Internal (CAPEX) investment analysis

  • External (M&A) financial decision-making

  • Evaluation of dividend, buy-back policies

  • Financial plan development

  • Internal-external financial sourcing

  • Company financial lifespan

  • Debt and equity strategies

  • Leverage management and mis-management

Assessment summary

100% is awarded on the basis of the result of an unseen 3-hour examination paper in the Summer Term.

Essential reading

Corporate Financial Strategy, compiled by Dr Peter J Clark; Pearson Custom Publishing, 2012; ISBN 978-1-781347164

Past versions of this module

MSIN3017 16/17

Last updated Friday, 4 August 2017