Course Details
Course Information Package
Course Unit Title | BUSINESS FINANCE II | ||||||
Course Unit Code | AFIN102 | ||||||
Course Unit Details | |||||||
Number of ECTS credits allocated | 5 | ||||||
Learning Outcomes of the course unit | By the end of the course, the students should be able to:
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Mode of Delivery | Face-to-face | ||||||
Prerequisites | AFIN101 | Co-requisites | NONE | ||||
Recommended optional program components | NONE | ||||||
Course Contents | Calculation of cash flows: Income and taxes calculation, cash flow statement, depreciation and working capital adjustments, book value of assets and taxes on sale of asset, and opportunity cost adjustments in cash flow statement Applications of present value: Choice of assets with different economic lives using the equivalent annual cost approach, choice of optimal timing of investment in the present value context Financial Analysis and Planning: Categories of financial performance ratios (leverage, liquidity, efficiency, profitability, market based),calculation of different ratios, DuPont analysis of profitability, financial planning using ratio analysis, sustainable growth and dividend discount model with growth Risk and return: Expected return and risk of a portfolio and diversification benefits, the Capital Asset Pricing Model (CAPM) and beta risk, applications of CAPM for project evaluation using discounted present value Financing and the cost of capital: Miller-Modigliani theory and the value of the levered firm with debt tax shields, the weighted average cost of capital, the value of equity and debt, the impact of debt increase/decrease on the required returns of equity holders, and the adjusted present value approach Other issues in financing: International patterns in corporate financing, types of equity and debt, convertible and callable debt and their use as opposed to traditional debentures, rights issues versus new share issues Working capital management: Issues involved in working capital management, inventory management using the Economic Order Quantity model, credit quality and terms of sale (duration, discount), the decision to prepay or delay credit payment, factoring approach for collecting receivables | ||||||
Recommended and/or required reading: | |||||||
Textbooks |
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References |
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Planned learning activities and teaching methods | The taught part course is delivered to the students by means of lecturers, conducted with the help of computer presentations and the use of the board. Lecture notes and other course material like spreadsheet examples are available to students through the web. | ||||||
Assessment methods and criteria |
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Language of instruction | English | ||||||
Work placement(s) | NO |