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Online course materials for BMAN23000

Foundations of Finance A


Unit code: BMAN23000
Credit Rating: 20
Unit level: Level 2
Teaching period(s): Full year
Offered by Alliance Manchester Business School
Available as a free choice unit?: N

Requisites

Prerequisite

Additional Requirements

You must have passed BMAN10522/10522(M) or BMAN10552 (with an examination pass mark of 60%). BMAN23000(A) is only available to students on: BA (Econ); BEconSc; IBFE; Maths with Finance.

Pre-requisite course units have to be passed by 40% or above at the first attempt unless a higher percentage is indicated within this course outline. If the pre-requisite unit is defined as a compulsory course unit within your programme of study (Maths with Finance, IBFE, Accounting, BA Econ pathways for example) then progression onto the dependent unit is permitted as long as you have gained the appropriate amount of credit to progress on to the following year of your registered undergraduate programme.

Pre-requisites:
BMAN10522/10522(M) Financial Decision Making with a pass mark of 40% or
BMAN10552 Fundamentals of Finance with pass mark of 60% or above

Co-requisites: None

Dependent course units: BMAN20072, BMAN30060, BMAN30071, BMAN30091, BMAN30111, BMAN30242, BMAN30251, BMAN30702, BMAN30190 (this course only available to BA(Econ) Finance, BA (Econ) Accounting & Finance, BA (Econ) Economics & Finance - provided students have taken and passed BMAN23000(A), BMAN20072 and BMAN20081.
 

Aims

- to develop and extend the fundamental concepts of modern finance theory that were introduced in the first year
- to provide an understanding of asset valuation and issues associated with valuing assets
- to develop the core theoretical models of modern finance
- to engender an awareness of the predictions/implications of these models
- to provide an understanding of the NPV decision making rule and how NPV calculations can be modified in the face of such factors as inflation and taxation
- to analyse issues of risk and assess their impact on the investment decision
- to analyse the issue of whether altering the proportions of debt and equity in a firm's capital structure affects the market value of the firm
- to examine the impact of a firm's decision to pay dividends on its value

Overview

The course covers the valuation of assets, portfolio analysis, the capital asset pricing model, the arbitrage pricing theory and option pricing, the Net Present Value criterion for investment decision making, focusing on the rationale for its use and how it may be calculated under uncertainty, the capital structure decision and the dividend decision, and other topics in corporate finance.

Teaching and learning methods

Lectures: 32 hours over two semesters (2 hour slot every week)

Workshop: 8 hours (1 hour slot during 4 weeks in each semester)

There will also be a one hour question and answer session at the end of the semester 2 to prepare students for the exam.

Total study hours: 200 hours split between lectures, classes, reading, self-study and preparation for classes, coursework and examinations.

Informal Contact Methods
1. Office Hours
2. Online Learning Activities (blogs, discussions, self assessment questions)
3. Drop in Surgeries (Q&A sessions)

Learning outcomes

By the end of the course students:
- understand the way in which assets can be valued
- understand the core theoretical models of modern finance
- can distinguish between assumptions and implications of the theoretical models introduced
- understand and implement the NPV decision rule
- understand the role and use of the capital asset pricing model in appraising investment projects under conditions of uncertainty
- understand the effects of the corporate financing decision (the use of debt and equity) on the value of the firm under different scenarios
- understand the impact of dividend payments on the value of the firm

Assessment Further Information

2 hour unseen examination (60%).
One piece of assessed coursework (20%).
1 hour mid term test in January (20%).

 

Recommended reading

Berk, J. and DeMarzo, P., Corporate Finance, (Global Edition) Pearson.


 

Feedback methods

- Informal advice and discussion during lectures and workshops.

- Online exercises and quizzes delivered through the Blackboard course space.

- Responses to student emails and questions from a member of staff including feedback provided to a group via an online discussion forum.

- Specific course related feedback sessions.

- Written and/or verbal comments on assessed or non-assessed coursework.

- Generic feedback posted on Blackboard regarding overall examination performance.

Study hours

  • Assessment written exam - 3 hours
  • Lectures - 32 hours
  • Practical classes & workshops - 8 hours
  • Independent study hours - 157 hours

Teaching staff

Maria-Teresa Marchica - Unit coordinator

Amedeo De Cesari - Unit coordinator

Stefan Petry - Unit coordinator

Alexandros Kostakis - Unit coordinator

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