Current Issues in Financial Management

What will be covered in this module?

1. Efficient market hypothesis
   • Stock markets
   • Test of market efficiency
   • Implications and lessons
2. Long-term finance (2 lectures)
   • Debt instrument
   • Equity finance
3. Capital structure
   • Modigliani and Miller Propositions
   • Costs of financial distress
4. Mergers and acquisitions and SME Finance
   • Motives and types of M&As
   • Success and failure of M&As
   • Theoretical issues and empirical evidence of SME finance
5. Corporate valuation (2 lectures)
   • Sources of values
   • Risk-adjusted discount rate methods
   • Certainty equivalent cash flow method
   • Venture capital method
6. Practical issues in investment appraisal
   • Capital rationing
   • Tax and inflation
   • Sensitivity and scenario analysis

Learning and Teaching

• 10 two-hour lectures and 5 one-hour tutorials
• Textbook and readings

Learning and Teaching

Other references:

1. Hillier, D., Clacher, I., Ross, S., Westerfield, R., and Jordan, B., (2011), Fundamentals of Corporate Finance, McGraw Hill (European Edition).
2. Arnold, G., (2012) Corporate Financial Management, 5rd Edition, FT/Pearson, London.
3. Brealey, R., Myers, S., and Marcus, A., J., (2011), Fundamentals of Corporate Finance, (7th Edition), McGraw Hill Irwin, London.

• • Additional references will be added later

Assessment

• Coursework – 50%
  • No more than 2,500 words;
  • eSubmission before 16:00 on 24/4/2017 to ‘Turnitin’
• Examination – 50%
  • closed-book
  • 2 hr
  • Two out of three from section A, Two out of three from Section B.
• Reassessment
  • Candidates failing this module will be reassessed in the failed
    element/s only

Coursework

• Topic:
  • Are commodity markets efficient?
  • — A critical review of the literature

Suggested Structure

• Introduction: The efficiency of asset market in general and that of the commodity market in specific.
• Theory: What does the theory say about the efficiency of the commodity market?
• Empirical Evidences: What do evidences say about the efficiency of the commodity market?
• Conclusion: Balanced and with reference to the above points

Maximum 2,500 words

Marking Criteria

• Collecting and analysing relevant information in appropriate ways;
• Seeking academic support;
• Understanding the implications of both theory and empirics;
• Displaying capability of integrating knowledge and using it to serve the purpose (persuasively argue for the points you are trying to make, whatever it might be).

Marking Criteria

As a rough guidance, a first class essay has the following qualities

1. A collection of rich and relevant information;
2. A thorough understanding of the relevant literature: theory and empirics;
3. Synthesizing the theoretical arguments and empirical evidences to form your own view with some healthy critiques of the existing wisdom;
4. A balanced structure of the paper giving the right amount of space for each component;
5. A logic structure of arguments with focus and depth in the discussion of the problem in hand;

    

6. Introduced the topic with context and justification;

    

7. Concluded the paper by linking the conclusions back to the analysis in the main body of the text; and the conclusions are well balanced;

    

8. Elegant writing with good grammar and without spelling mistakes.

    

9. Use of diagrams and tables where appropriate.
10. Peer reviewed sources of information fully acknowledged and referenced in recognized citation standards both in the text and in the bibliography.