Registry

Module Specifications

Current Academic Year 2012 - 2013
Please note that this information is subject to change.

Module Title	Principles of Finance 1
Module Code	EF216
School	DCUBS
Online Module Resources
Module Teacher	Liam Hourihane
NFQ level	8	Credit Rating	5
Pre-requisite	None
Co-requisite	None
Compatibles	None
Incompatibles	None

Description

Corporate Finance deals with the allocation and acquisition of a firm's resources. This module explores from a financial manager perspective the best method for finding and allocating capital to increase shareholders' wealth. The objective of this course if to equip students with the tools and techniques to create value from the firm's financing and investment decisions.Concepts such as corporate objectives, business risk, financial risk and the valuation of financial assets are studied. major policy areas of the firm covering investment appraisal, optimal capital structure and dividend payout are also examined. Special emphasis is placed on long-term managerial policies and their likely impact on the market value of the firm.

Learning Outcomes

1. Solve problems in a financial and business context and to use appropriate financial techniques in order to make decisions from various options
2. Select and defend the use of appropriate models for valuing assets and opportunities
3. Calculate and compare the present and future value of money for planning purposes.
4. Critically evaluate the theoretical and practical considerations inherent in the capital investment decision
5. Apply business finance knowledge to a given situation and provide recommendations.

Workload	Full-time hours per semester
*Type*	*Hours*	*Description*
Lecture	24	Formal lectures
Tutorial	9	Review of class material
Examination	1	Class test
Directed learning	18	Preperation for tutorial
Examination	40	Prepaeration for terminal examination
Independent learning	10	Preperation for class test
Independent learning time	23	Reading and preperation for lectures
Total Workload: 125

All module information is indicative and subject to change. For further information,students are advised to refer to the University's Marks and Standards and Programme Specific Regulations at: http://www.dcu.ie/registry/examinations/index.shtml

Indicative Content and Learning Activities

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..

The object of the firm.
The role of the financial manager - corporate goals and corporate governance - economic factors that impact on the financial goals of the firm..

Time value of Money.
Quantitative methods of financial management - financial analysis - managers - individual investors - techniques for valuation of different classes of securities - money markets - bonds - shares..

Investment Appraisal.
Criteria to guide investment decisions in both physical and financial assets - payback - net present value - internal rate of return - accounting rate of return profitability index - capital rationing - inflation - tax - uncertainity - non financial factors - sensitivity analysis..

Capital Asset Pricing Model (CAPM).
- unsystematic risk - systematic risk - capital market line - security market line - applications of CAPM.

Cost of Capital.
Calculate the cost of the various instruments and the weighted cost of capital (WACC).

Portfolio Theory.
Calculation of the expected returns and standard deviation for shares - combination of investments - efficient frontier - choosing the optimal portfolio - benefits of diversification..

Dividend Policy.
The dividend puzzle, Lintner model, M&M irrelevancy argument, clientele and signaling effects.

Assessment Breakdown
Continuous Assessment	20%	Examination Weight	80%

Course Work Breakdown
Type	Description	% of total	Assessment Date
Oral presentations	Class Test	20%	Week 6

Reassessment Requirement
Resit arrangements are explained by the following categories; 1 = A resit is available for all components of the module 2 = No resit is available for 100% continuous assessment module 3 = No resit is available for the continuous assessment component
This module is category 1

Indicative Reading List

Brealey, R.A. and Myers, S.C: 0, Principles of Corporate Finance,
Arnold Glen: 0, Corporate Financial Management,
Ross, A.A., Westerfield, R.W. and Jaffe, J.F: 0, Corporate Finance,
Pike, R. & Neale, B,: 0, Corporate Finance & Investment: Decisions & Strategies,

Other Resources

None

Array

Programme or List of Programmes

BSSAO

Study Abroad (DCU Business School)

EBF

BA in Global Business (France)

EBG

BA in Global Business (Germany)

EBS

BA in Global Business (Spain)