ECO-20051 - Module Specification
Keele Business School
Faculty of Humanities and Social Sciences

Programme/Approved Electives for 2024/25

Available as a Free Standing Elective

Co-requisites

None

Prerequisites

ECO-20007 Finance 1

Barred Combinations

None

Description for 2024/25

In this module students will learn how companies make financial decisions regarding capital expenditure on their activities, and the sources of finance to support these activities. You will learn the alternative techniques of capital investment appraisal and their theoretical underpinning. You will learn the many ways in which risk can be captured in this decision making process. You will learn the theories and practical considerations that determine the choice between bonds and shares for financing corporate activity and the role of taxes and bankruptcy risks in this choice. You will learn how firms determine how to reward their shareholders from their earnings. This module (in combination with Finance 1) provides students with the opportunity to gain the knowledge and skills in finance and financial markets recognised and accredited by Finance and Accounting professional bodies.

By building on the introduction to finance provided by Finance, the aim of this module is to provide students with an understanding of financial decision making in the context of a company and in the face of economic uncertainty.

Intended Learning Outcomes

Understand the scope of corporate finance: 1,2
Undertake and explain the advantages and disadvantages of alternative methods of capital investment appraisal by firms: 1,2
Apply techniques of investment appraisal under capital rationing: 1,2
Understand the assumptions underlying and the consequences of the separation of investment and financing decisions by companies: 1,2
Demonstrate how project appraisal techniques should be adjusted for risk and missing information: 1,2
Interpret and estimate the components of the WACC (weighted average cost of capital): 2
Understand how and when to use scenario analysis, sensitivity analysis, break-even analysis and decision trees in the evaluation of corporate investment decisions: 2
Demonstrate an understanding of the theory and evidence regarding corporate capital structures: 2
Demonstrate an understanding of the theory, consequences and evidence regarding corporate payout decisions: 2

Study hours

Lectures: 20
Tutorials: 4
Class test: 2
Final exam: 2
Tutorial preparation: 24
Class test preparation: 12
Self study and final exam revision: 86

School Rules

ECO-20007 Finance 1

Description of Module Assessment