Postgraduate Course: Treasury Management and Corporate Finance (CMSE11172)
Course Outline
| School | Business School |
College | College of Humanities and Social Science |
| Credit level (Normal year taken) | SCQF Level 11 (Postgraduate) |
Availability | Not available to visiting students |
| SCQF Credits | 15 |
ECTS Credits | 7.5 |
| Summary | The course combines core topics in corporate finance with several more technical topics in company financial management. Two topics in particular will be considered in some detail, namely capital budgeting, and techniques of risk management from a company's point of view. Other topics focused on financial management are the management of debt, working capital, and international companies. |
| Course description |
The course objectives are to equip the students with a clear understanding of both basic and advanced corporate finance issues. The course will teach students to apply their understanding of theories and corporate finance models in real world situations. The objective is to develop the theoretical and practical tools for students who are embarking on a career in finance or who wish to move to a senior management career from a finance specialization.
Syllabus
Time Value of Money; Investment decisions and appraisal techniques
Reorganizing Financial Statements into Cash Flows
Valuing Bonds and Stocks, Discount rates
Valuing M&As
Real Options
International Finance: Currency and Interest rate risk management
Capital structure: Overview of the financing decision; The optimal financial mix
Dividend policy; Analysing Cash Returned to Stockholders
Student Learning Experience
Students will have knowledge of the issues that arise in managing a multinational company.
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Entry Requirements (not applicable to Visiting Students)
| Pre-requisites |
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Co-requisites | |
| Prohibited Combinations | |
Other requirements | For Business School PG students only, or by special permission of the School. Please contact the course secretary. |
Course Delivery Information
| Not being delivered |
Learning Outcomes
On completion of this course, the student will be able to:
- Understand and apply discounted cash-flow analysis, with critical understanding of how to allow for uncertainty
- Understand and critically discuss the concept of the weighted average cost of capital and the effect of gearing on the WACC.
- Critically evaluate the main theories to explain a companys gearing and dividend policies.
- Critically discuss how a company can use the main techniques and instruments available to manage currency and interest rate risk.
- Critically evaluate the main issues in managing debt and in managing working capital.
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Reading List
Required:
Hillier D. et. al., (2010) Corporate Finance, 1st European Edition, New York: McGraw-Hill Education.
Damodaran A., (2010) Applied Corporate Finance, 3rd Edition, New York: John Wiley & Sons, Ltd.
Recommended:
Brealey, R.A., Myers, S.C. & Allen, F., Principles of Corporate Finance, McGraw-Hill.
Berk, J. & DeMarzo, P., Corporate Finance, Pearson.
Hillier, Ross, Westerfield, Jaffe & Jordan, Corporate Finance, European edition, McGraw-Hill.
Megginson, W.L., Smart, S.B. & Gitman, L.J., Corporate Finance, Thomson South-Western. |
Additional Information
| Graduate Attributes and Skills |
Cognitive Skills:
After completing this course, students should be able to:
* Solve quantitative problems using time-lines
* Build and use payoff profiles in the analysis of exposure to risk
* Design spreadsheets for solving financial problems
* Comprehend financial texts and extract meaningful information from them for financial decision making
* Express clearly verbally and in writing relationships between financial variables, sensitivity of results to different factors, formulate logical recommendations
Subject Specific Skills:
After completing this course, students should be able to:
* Calculate the cash flows a firm generates from its financial statements
* Calculate NPV and construct an NPV profile (the graphical relationship between NPV and the discount rate)
* Analyse a potential investment only based on its NPV profile
* Collect the necessary input data and calculate the weighted average cost of capital of a company
* Generate scenarios and perform sensitivity analysis in the contexts of NPV and WACC calculations
* Calculate the cost of hedging for basic currency and interest rate risk management instruments
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| Keywords | finTreasuryManagementandCorporateFinance |
Contacts
| Course organiser | |
Course secretary | Mr Jonathan Macbride
Tel: (0131 6)51 3028
Email: Jonathan.MacBride@ed.ac.uk |
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