BE870-7-SP-CO:
Financial Management
PLEASE NOTE: This module is inactive. Visit the Module Directory to view modules and variants offered during the current academic year.
2023/24
Essex Business School
Colchester Campus
Spring
Postgraduate: Level 7
Inactive
Monday 15 January 2024
Friday 22 March 2024
10
04 October 2018
Requisites for this module
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Module Description
The 10 credit compulsory module covers two important aspects of financial decision making in a modern corporate setting: investment decisions and raising finance. Investment decisions have large capital outlays and these investments, while they typically entail irreversible commitments of capital, also have flexibility to make changes, embedded in them. We initially focus on the decision-making associated with such investments, while covering issues such as time value of money and risk, and then progress to current thinking and practice surrounding the concerns of irreversibility and flexibility, namely real options. The primary concept in finance is the trade-off between taking a level of risk and the necessary return required when exposed to that level of risk. We pay close attention, therefore, to the methods employed in finance to help guide judgements on whether the return expected from taking on risky investments is commensurate with the level of risk exposure inherent in them.
No organised activity is possible without resources and the raising of monetary capital resources, consequently, needs to be examined. We will study the raising of capital from banks and from markets, including raising of capital through venture capital firms as well as from stock markets via Initial Public Offerings (IPOs) and Seasoned Equity Offerings (SEOs). We then study the question of whether there needs to be a balance between levels of borrowing and of equity in the monetary capital base of an organisation. While raising finance and investing it occupy pole position, deciding on suitable policies and selection of appropriate mechanisms for paying out funds to providers of capital is an ever present concern of all corporate managers. We address this concern and wrap up by investigating the widely held notion that capital markets are efficient in processing information and the implications for this notion, of the evidence that investors are prone to several biases of judgment and of decision making.
Aims
The aims of this "Introduction to Finance" module are to:
1. describe standard investment decision making criteria and their shortfalls,
2. illustrate the ideas of irreversibility and of flexibility in capital investments,
3. explain the concept of matching risk with expected returns,
4. examine the sources of capital and the idea of balancing among sources,
5. study corporate payout policy and examine the factors influencing it,
6. examine the notion of capital market efficiency and discuss judgment biases.
Learning Outcomes
On completion of the course you should be able to:
* Evaluate investments employing standard criteria, such as Net Present Value, and explain their shortcomings.
* Describe the irreversibility and flexibility of capital investments and illustrate the use of real options.
* Evaluate investments while employing models that match risk and return as well as describe the conditions in which the models can be reliably deployed,
* Explain critically the idea of market efficiency and discussing the implications of behavioural biases for it.
* Describe the ways of raising finance and discuss the factors that need to be considered when deciding a balance between debt and equity capital, and describe typical payout policies and discuss the factors bearing on it.
No information available.
No information available.
Lectures, seminars, workshops, formative assessments and group work.
Details will be available in the Module Handbook and on Moodle.
This module does not appear to have a published bibliography for this year.
Assessment items, weightings and deadlines
| Coursework / exam |
Description |
Deadline |
Coursework weighting |
| Exam |
Main exam: Remote, Open Book, 120 minutes during Summer (Main Period)
|
| Exam |
Reassessment Main exam: Remote, Open Book, 120 minutes during September (Reassessment Period)
|
Additional coursework information
Written examination
Exam format definitions
- Remote, open book: Your exam will take place remotely via an online learning platform. You may refer to any physical or electronic materials during the exam.
- In-person, open book: Your exam will take place on campus under invigilation. You may refer to any physical materials such as paper study notes or a textbook during the exam. Electronic devices may not be used in the exam.
- In-person, open book (restricted): The exam will take place on campus under invigilation. You may refer only to specific physical materials such as a named textbook during the exam. Permitted materials will be specified by your department. Electronic devices may not be used in the exam.
- In-person, closed book: The exam will take place on campus under invigilation. You may not refer to any physical materials or electronic devices during the exam. There may be times when a paper dictionary,
for example, may be permitted in an otherwise closed book exam. Any exceptions will be specified by your department.
Your department will provide further guidance before your exams.
Overall assessment
Reassessment
Module supervisor and teaching staff
Dr Hardy Thomas, email: hardt@essex.ac.uk.
Hardy Thomas
Email hardt@essex.ac.uk
Telephone 01206 873415
Room 5NW.4.11
Office hours Tuesday: 15:00-17:00 Wednesday:11:00-12:00
No
No
No
No external examiner information available for this module.
Available via Moodle
No lecture recording information available for this module.
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