The University of Southampton
Courses

MANG6295 Introduction to Finance

Module Overview

The “Introduction to Finance” module aims to offer a comprehensive introduction to Finance. You will learn various analytical tools to analyse capital structure and all the sources and types of long-term corporate finance. You will also learn about the application of various risk management techniques and their associated implications. This module aims to bridge the gap between providing operational expertise in finance and applying the concepts of finance in practice.

Aims and Objectives

Module Aims

As the lead subject for both the MSc Finance and MSc Risk & Finance degrees this module is aimed partially at shoehorning you into your MSc degree. The module will start with core basics and build rapidly to more challenging material. The design to start with core basics is aimed at ensuring that all students are on a level playing field and are up to speed with the necessary skills to tackle the more advanced finance modules in the second semester. The “Introduction to Finance” module aims to offer a comprehensive introduction to Finance. You will learn various analytical tools to analyse capital structure and all the sources and types of long-term corporate finance. This module aims to bridge the gap between providing operational expertise in finance and applying the concepts of finance in practice. The focus is on understanding the relationships between present values and future values, the time value of money, company long-term capital procurement and the importance of capital structure. This agenda is broken down into topics and consists of six educational blocks.

Learning Outcomes

Knowledge and Understanding

Having successfully completed this module, you will be able to demonstrate knowledge and understanding of:

  • present and future values of financial instruments
  • how companies calculate their cost of capital
  • capital structure and long-term funding requirements
Subject Specific Intellectual and Research Skills

Having successfully completed this module you will be able to:

  • value stocks and shares
  • analyse cost of capital
  • analyse strategic decisions (e.g. long-term funding or capital structure)
  • interpret financial values
  • relate cost of capital to management investment decisions
  • critically evaluate a company’s capital structure
  • critically evaluate a company’s dividend policy
Transferable and Generic Skills

Having successfully completed this module you will be able to:

  • demonstrate numeracy skills
  • evaluate financing decisions
  • Succeed in team work in the context of finance

Syllabus

The module introduces concepts of Finance from the perspective of the Financial Manager, which combines aspects of corporate finance and financial management. In alignment with our cutting edge approach at Southampton, and what make us unique, is the focus on case studies aimed at highlighting real world practical relevance of the material we teach. The module will use global case studies and will analyse capital structure in different settings (countries, industries and firm type). Moreover, the module will illustrate the importance of international capital markets. Topics: 1. Business Finance The first part (4 hours of lectures) will define finance, explain the goal of the firm, corporate governance, the role of ethics and the agency issue. In addition, it will analyse financial institutions and markets, and the role they play in managerial finance. Finally, it will review both the long-term and medium-term funding requirements of the firm - this part also covers short-term liquidity needs. 2. Maths of Finance The second part (4 hours of lectures) aims to provide students with an introduction to interest rate mathematics. Strategic aspects of the time value of money will be explored through numerical examples. 3. Capital Structure Determinants The third part (4 hours of lectures) highlights the importance of capital structure and access to external finance. We discuss various forms of equity and debt issues. The theoretical aspects of capital structure as well as practical issues will be analysed. 4. Long-Term Equity based Finance The fourth part (4 hours of lectures) illustrates the concepts of rights issues as a mode of raising long-term equity finance. In particular, we will examine a number of case studies to learn from real work examples. 5. Long-Term Hybrid Finance This penultimate part (4 hours of lectures) looks in depth at the theory and use of convertible bonds as an important source of long-term hybrid finance. 6. Dividend Payout Policy The final part (4 hours of lectures) looks in depth at the theory and practice of dividend policy employed by companies around the globe.

Learning and Teaching

Teaching and learning methods

Teaching methods include: The module will be taught by a mixture of methods ranging from guided background reading, lectures, group work and the exploration of mini case-studies. The lecturer will also draw upon relevant real world stories breaking in the financial press. The lecturer will introduce the concepts, and participants will have the opportunity to practice and apply the methods discussed. Learning activities include: • Numerical exercises in class and for homework • A group assignment • Presentation of findings in class

TypeHours
Teaching24
Independent Study126
Total study time150

Resources & Reading list

Financial Times. Newspaper - in library or URL

Economist. Magazine - in library or URL

Brealey, Myers and Allen. Principles of Corporate Finance. 

Farrell, J.. Portfolio Management: Theory and Application. 

Copeland, T. E., Weston, J. F. and Shastri, K.. Financial Theory and Corporate Policy. 

Assessment

Formative

Feedback

Summative

MethodPercentage contribution
Examination  (2 hours) 70%
Group Assignment  (3000 words) 30%

Repeat

MethodPercentage contribution
Examination  (2 hours) 100%

Referral

MethodPercentage contribution
Examination  (2 hours) 100%

Repeat Information

Repeat type: Internal & External

Costs

Costs associated with this module

Students are responsible for meeting the cost of essential textbooks, and of producing such essays, assignments, laboratory reports and dissertations as are required to fulfil the academic requirements for each programme of study.

In addition to this, students registered for this module typically also have to pay for:

Textbooks

Recommended texts for this module may be available in limited supply in the University Library and students may wish to purchase the core/recommended text as appropriate.

Please also ensure you read the section on additional costs in the University’s Fees, Charges and Expenses Regulations in the University Calendar available at www.calendar.soton.ac.uk.

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