Introduction to Corporate Finance

Corporate finance is the division of finance that deals with how corporations deal with funding sources, capital structuring, and investment decisions. Corporate finance is primarily concerned with maximizing shareholder value through long and short-term financial planning and the implementation of various strategies. Corporate finance activities range from capital investment decisions to investment banking.

On completion of the module, students should be able to:

• Understand the implications of the overarching strategic objectives of the organisation for the finance function.
• Explain the role of the organisation’s financial managers in realising these strategic objectives.
• Be able to described and evaluate the different sources of corporate finance (e.g. equity, debt, retained earnings and so on …), and  be able to explain the relative advantages and disadvantages of each source.
• Understand how risk and the cost of capital impact on investment appraisal, and explain how such factors affect the value of a capital project.
• Approximate the organisation’s cost of capital, and understand how this cost is impacted by taxation, “leverage” and other factors.
• Assess the external and internal influences on a corporation’s capital structure, payout policy and policy in respect of risk management (via insurance, derivatives, and other instruments).
• Explain how the corporation’s capital structure, payout policy and risk policy impact upon investment decisions.
• Have good understanding of, and be able to discuss current topical issues under debate in the world of corporate finance.