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DRPS : Course Catalogue : Business School : Business Studies

Undergraduate Course: Equity Finance (BUST10155)

Course Outline
SchoolBusiness School CollegeCollege of Arts, Humanities and Social Sciences
Credit level (Normal year taken)SCQF Level 10 (Year 3 Undergraduate) AvailabilityAvailable to all students
SCQF Credits20 ECTS Credits10
SummaryThe course is only open to Year 3 or Year 4 students on the following degree programmes:
MA Accounting and Finance
MA Finance and Business
MA Economics with Finance

The Equity Finance elective is designed to provide an overview of equity financing, with a clear focus on initial public offerings (IPOs). You will gain familiarity with the market for IPOs more generally and the IPO process in particular. Additionally, you will be introduced to seasoned equity offerings (SEOs). Relevant (empirical) research will be included aiming to help you develop a broad knowledge and understanding of issues relevant to the raising of equity capital.
Course description You will familiarise yourself with the most important terms and issues surrounding equity financing. Through readings, you will learn about the processes and institutional setting of the primary market for equity financing, including the importance of the share allocation process in an IPO and the long-run performance of IPOs. Moreover, you will learn about SEOs and the short-term as well as long-term capital market reaction to this choice of financing. Readings will not only be based on standard books but will include a fair number of academic articles that elucidate contemporary issues relevant to equity financing. Deep understanding of these topics should equip you with a solid base of analytical and critical reasoning skills to help enable the pursuit of a wide array of careers including in investment banking, corporate finance and treasury management.

Outline Content

Topics covered in this course include an introduction to the IPO market, sources of equity financing, the benefits and costs of going public, the mechanics of the going public process, the issue of IPO underpricing as well as the long-run performance of IPOs. Alternatives to the IPO process will be discussed, too. Additionally, SEOs will be analysed, their reasons and empirical evidence on their capital market perception.

Student Learning Experience

This course places a great emphasis on independent learning. Before each lecture, you will be provided with a list comprising 2-3 core readings and a number of additional readings. You are expected to read the core readings and ideally most if not all of the additional ones. The lectures will explore particular aspects of the readings and attempt to help you put materials in context. They are not a substitute for the readings. The nature of the material means that in many cases there may be no single acceptable answer. You are expected to learn how to argue a case that is supported by academic theory and empirical evidence.
Entry Requirements (not applicable to Visiting Students)
Pre-requisites Students MUST have passed: Introduction to Corporate Finance (BUST08030)
Prohibited Combinations Students MUST NOT also be taking Principles of Finance (BUST08003)
Other requirements None
Information for Visiting Students
Pre-requisitesVisiting students must have at least 4 Business courses at grade B or above. This MUST INCLUDE at least one Finance course at intermediate level. This course cannot be taken alongside BUST08003 Principles of Finance. We will only consider University/College level courses.
High Demand Course? Yes
Course Delivery Information
Academic year 2023/24, Available to all students (SV1) Quota:  None
Course Start Semester 2
Timetable Timetable
Learning and Teaching activities (Further Info) Total Hours: 200 ( Lecture Hours 20, Programme Level Learning and Teaching Hours 4, Directed Learning and Independent Learning Hours 176 )
Assessment (Further Info) Written Exam 70 %, Coursework 0 %, Practical Exam 30 %
Additional Information (Assessment) 70% Written Exam (Individual) - Assesses all course Learning Outcomes.

30% Presentation (Individual) - 7 minutes - Assesses all course Learning Outcomes.
Feedback Formative: Feedback will be provided throughout the course.

Summative: Feedback will be provided on the assessments within agreed deadlines.
No Exam Information
Learning Outcomes
On completion of this course, the student will be able to:
  1. Understand and critically discuss the going public process.
  2. Understand and evaluate the reasons for going public and the associated costs and benefits.
  3. Understand and critically evaluate current topics pertaining to initial public offerings.
  4. Understand reasons of the long-run stock performance of companies following an initial public offering.
  5. Understand and assess the main reasons for seasoned equity offerings and the capital market reaction to seasoned equity offerings.
Reading List
Brearly, R. A., Myers, S. C., &. Allen, F. (2020) Principles of Corporate Finance, Thirteenth Edition, McGraw-Hill.

Berk, J. & DeMarzo, P. (2017), Corporate Finance, Fourth Edition, Pearson Education.
Additional Information
Graduate Attributes and Skills Communication, ICT, and Numeracy Skills

After completing this course, students should be able to:

Convey meaning and message through a wide range of communication tools, including digital technology and social media; to understand how to use these tools to communicate in ways that sustain positive and responsible relationships.

Critically evaluate and present digital and other sources, research methods, data and information; discern their limitations, accuracy, validity, reliability and suitability; and apply responsibly in a wide variety of organisational contexts.

Knowledge and Understanding

After completing this course, students should be able to:

Demonstrate a thorough knowledge and understanding of contemporary organisational disciplines; comprehend the role of business within the contemporary world; and critically evaluate and synthesise primary and secondary research and sources of evidence in order to make, and present, well informed and transparent organisation-related decisions, which have a positive global impact.

KeywordsEquity Finance,Initial Public Offerings,Seasoned Equity Offerings
Course organiserDr Sascha Kolaric
Course secretaryMiss Lindsay Hunter
Tel: (0131 6)50 3823
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