MODULE AIM To provide students with an in-depth study of corporate finance techniques and processes which enable management to evaluate and make strategic decisions in the context of competitive international environment.
LEARNING OUTCOMES Upon the successful completion of this module, the student should be able to demonstrate the ability to:
1. Understand the key themes that underpin modern corporate finance and their relevance to business capital structure and corporate governance.
2. Develop a critical understanding of the financing decisions of organisations in modern economies
In your report, you are required to cover the following areas:
Part a) [10 marks, 500 words approximately] A brief history of the chosen corporation, including an outline of the key corporate events over the past five years (e.g. any M&A, change of directors, significant increases/decreases of earnings, litigation cases/financial penalties).
Part b) [50 marks, 2,500 words approximately]
A critical analysis of the corporation’s financial performance*.
• Calculate and evaluate the corporation’s liquidity and leverage ratios for the past 5 years;
• Compare the ratios to the ratios of major competitor(s) and/or sector average if possible; A Review the alternative capital structure theories and their implications.
Briefly review the capital structure theories drawing on published empirical research.
Download monthly share prices of the company and calculate average annual share returns for the past five years (use average for 12 months).
Comment on the variation in the capital structure and share returns of the company i.e. Is there association between leverage and return?
Part c) [40 marks, 2,000 words approximately] Select one of the chosen company’s largest recent investment activities during the past five years and write on the followings:
The purpose(s), aims and expected outcomes of this investment.
The size of the investment, and how it was financed. The feasibility of the investment, at both the macro and micro level.
The actual up-to-date outcomes of the investment: i.e. why it is successful (and/or what went wrong).
Each student is also required to make a 20-min presentation of their reports during the last lecture of the term, and feedback to the presentation can then be incorporated in the final submission. Although the presentation carries no weightings to the final module grades, it is a great exercise to have students build confidence and communication skills that they will need in their future careers.
*For all data requirements go to finance.yahoo.co.uk and the corporate web site of your chosen company
Please note the following when completing your written assignment:
1. Writing: Written in English in an appropriate business/academic style
2. Focus: Focus only on the tasks set in the assignment.
3. Document format: In business report format or any other suitable format appropriate to the context. The total word count should be equivalent to a total word count of 5000 words. Ensure a clear title, course, and name or ID number is on a cover sheet and a reference list using Harvard referencing throughout is also provided.
4. Research: Research should use reliable and relevant sources of information e.g. academic books and journals that have been peer reviewed. The research should be extensive. The use of a range of information sources is expected – academic books, peer reviewed journal articles, professional articles, press releases and newspaper articles, reliable statistics, company annual reports and other company information. Please use proper Harvard referencing throughout your work.
5. References and Turnitin Additionally, you should refer to text books, current news items and benchmark your organisation against other organisations to ensure your assignment is current and up-to-date. High-level referencing skills using the Harvard Method must be demonstrated throughout your work and all sources listed alphabetically.