Undergraduate Course: Principles of Finance (BUST08003)
||College||College of Humanities and Social Science
|Credit level (Normal year taken)||SCQF Level 8 (Year 2 Undergraduate)
||Availability||Available to all students
|Summary||The course aims to develop in students an understanding of the basic principles of finance. It builds on the introduction to finance provided in Foundations of Business. The course has a quantitative slant, and is designed to give a theoretical introduction to financial markets and company finance policies. It is a prerequisite for finance Honours courses.
The course looks at the way assets are valued in financial markets. It considers interest rates and the pricing of fixed-income bonds; stock market prices and returns; stock market risk and the influence of risk on the pricing of shares; and the characteristics and pricing of financial futures and options. The course also covers some aspects of company finance theory. These include business investment decisions, sources of finance, the cost of capital, the financial structure decision and the dividend decision.
Prices and Returns in Financial Markets -
- Financial decision making;
- Price of a stream of cash flows;
- Bond prices;
- Stock prices;
- Option prices;
- Risk and return.
Company Financial Decisions -
- Introduction to corporate finance;
- The capital budgeting decision;
- Sources of finance;
- Cost of capital;
- Capital structure;
- Dividend policy.
STUDENT LEARNING EXPERIENCE
The students are introduced to the topics in lectures. The topics are then related to particular situations in tutorials, thereby showing how principles apply in practice. The coursework assignment requires students to analyse and discuss a particular issue using their own judgement where relevant.
Information for Visiting Students
|Pre-requisites||Visiting students should usually have at least 1 introductory level Business Studies course at grade B or above (or be predicted to obtain this) for entry to this course. We will only consider University/College level courses.
|High Demand Course?
Course Delivery Information
|Academic year 2018/19, Available to all students (SV1)
|Learning and Teaching activities (Further Info)
Lecture Hours 20,
Seminar/Tutorial Hours 8,
Summative Assessment Hours 3,
Programme Level Learning and Teaching Hours 4,
Directed Learning and Independent Learning Hours
|Assessment (Further Info)
|Additional Information (Assessment)
||Assignment in semester 1 (1,200 words maximum) = 20%, December degree exam = 80%; August resit exam = 100%.
||Coursework marks will be published via Learn. Students can also look at their individual feedback in the Undergraduate Office (Room 1.11, Business School, 29 Buccleuch Place) and take away a copy of the feedback form.
Examination marks will be posted on Learn (together with generic feedback and examination statistics) as soon as possible after the Board of Examiners meeting (normally end of January/beginning of February). Students will have the opportunity to look at their examination scripts from early February in the UG Office.
||Hours & Minutes
|Main Exam Diet S1 (December)||2:30|
|Resit Exam Diet (August)||2:30|
On completion of this course, the student will be able to:
- Describe the main financial assets and how they may be valued.
- Describe the key aspects of company finance theory.
- Discuss critically the contribution of finance theory to financial practice.
|Recommended reference book|
Jonathan Berk and Peter DeMarzo, Corporate finance, 3rd edition (Global edition), 2013, Pearson
Additional reference books
Glen Arnold, Essentials of corporate financial management, 2007, Financial Times/Prentice Hall
Peter Moles, Robert Parrino, and David Kidwell, Corporate finance, (European edition), 2011, John Wiley & Sons
|Graduate Attributes and Skills
||On completion of the course, students will be able
- to demonstrate that they can work in a tutorial group to analyse a financial problem using concepts covered in the lectures;
- to demonstrate that they can solve simple problems in finance;
- have been encouraged to develop their written skills through the coursework assignment and the degree examination;
- be able to demonstrate an ability to solve numerical problems through tutorials and the degree examination;
- be able to communicate effectively in a tutorial group;
- be aware of the techniques and insights relevant to the valuation of financial assets and company financial decisions;
- be aware of the uses and limitations of these techniques and insights.
|Additional Class Delivery Information
||2 x 1 hour lectures per week, weeks 1-10; plus compulsory tutorials, 1 hour per week for 8 weeks, weeks 3-10.
|Course organiser||Ms Yue Liu
Tel: (0131 6)50 4309
|Course secretary||Mr Matthis Hervieux