Corporate Finance (BUSA90046)

Intended learning outcomes

At the conclusion of the subject, students should understand the following concepts:

• The major financial problems faced by public and private firms. The specific problems of private firms are considered at length
• Techniques and instruments for managing risk. Especially insurance contracts and the use of hedging instruments such as futures contracts and swap contracts.
• Management of liquidity and working capital of the firm through bank lines of credit and trade credit.
• A broad understanding of the capital structure of the firm. In addition to the standard questions of debt v equity, long term v short term debt and fixed v floating debt, other forms of financing are considered, especially franchising and leasing.
• How firms use weighted average cost of capital in choosing projects. How real options affect the capital budgetting decision. How dividend imputation effects the WACC of firms.
• The essential features of relations between commercial banks and firms, and also investment banks and firms.