Undergraduate 

Business Economics MA(SocSci)

Financial Markets and Corporate Finance ECON4013

  • Academic Session: 2021-22
  • School: Adam Smith Business School
  • Credits: 15
  • Level: Level 4 (SCQF level 10)
  • Typically Offered: Either Semester 1 or Semester 2
  • Available to Visiting Students: Yes
  • Available to Erasmus Students: Yes

Short Description

The first part of the course discusses mergers and acquisitions, the Capital Asset Pricing Model (CAPM) and multi-factor models and arbitrage pricing theory. The second part analyses the key concept of the Efficient Markets Hypothesis (EMH) and explains the basic concepts that underlie dividend policy choice and the capital structure decisions of the firms. This analysis is necessary in order to assess how much compensation should shareholders receive and whether the choice of debt to equity mix matters. Furthermore, we explain the sources and patterns of corporate financing and present an overview of the process involved in raising capital. In the third part published papers related to corporate financing and in particular, firms' real decisions under capital market imperfections are presented and discussed. The fourth part focuses on the role of the financial system. We provide an overview of the UK and the international financial market, how they operate and the issues of financial innovation and regulation in these markets. Finally, in lecture 20 we revise the key points of the course.

Timetable

Lectures: Thursday 2.00 - 4.00pm

Additional 1 hour revision lecture

Tutorials are held at various times and can be selected on MyCampus

Excluded Courses

None.

Assessment

ILO (covered)

Assessment

Weighting

Word Length/Duration

4 - 6

Group project/presentation

30%

Around 10 minutes

Main Assessment In: April/May

Are reassessment opportunities available for all summative assessments? Not applicable

Reassessments are normally available for all courses, except those which contribute to the Honours classification. For non Honours courses, students are offered reassessment in all or any of the components of assessment if the satisfactory (threshold) grade for the overall course is not achieved at the first attempt. This is normally grade D3 for undergraduate students and grade C3 for postgraduate students. Exceptionally it may not be possible to offer reassessment of some coursework items, in which case the mark achieved at the first attempt will be counted towards the final course grade. Any such exceptions for this course are described below. 

Course Aims

The main aims of this course are to:

■ Analyse the interactions between financial markets and institutions and the financial decision making of firms

■ Develop students' capacity to analyse complex processes and interactions between corporate decision-makers and financial markets

■ Explore the implications of institutional developments in domestic and international financial systems for the operation of the international market for capital and financial services.

Intended Learning Outcomes of Course

By the end of this course, it is intended that students should be able to:

 

1. Apply core corporate finance theory and quantitative methods to applied
corporate finance topics


2. Critically analyse alternative accounts of corporate motivation and decision-making regarding capital structure;


3. Evaluate theory and evidence regarding market efficiency;


4. Identify key developments in domestic and international financial institutions/ markets and evaluate the implications;


5. Critically discuss literature related to financial markets to raise corporate finance;


6. Communicate effectively and clearly in written and oral formats in groups or individually

Minimum Requirement for Award of Credits

None.