BUU33630 Corporate Finance and Equity Valuation

(5 ECTS)

Lecturers:

Caroline Kirrane

Phone: 086 123 7234
E-mail: ckirrane@tcd.ie          
Office Hours: 

Pre-Requisite: 

BUU22550 - Introduction to Finance

Module Description:

This module will provide a comprehensive introduction to the major principles and theories of corporate finance. It will also cover equity valuation and the various tools we use to value the equity in a business, whether it be listed on a stock exchange or the various forms of privately owned equity. How does a company make a decision to invest in a new production line? Does a firm’s corporate governance structure impact firm value? What, if any, are the ethical aspects of finance? What tools are commonly used to determine the financial health of a company? Does it matter if a company pays dividends, and if so to whom? What sorts of tools are available to tell an investor the return she should expect from a stock? What sort of risks are companies exposed to and how investors price them? How does capital structure policy affect firm value? These commonly asked financial questions form the core issues that we will address in this course. In the course we will be concerned both with the practice and theory of modern corporate finance 

Learning and Teaching Approach:

• 2 lectures per week
• 1 tutorial per week

Lectures will be in person in Trinity Business School. Our lectures are designed to provide overview and outline of the main areas and concepts of the topic under discussion. In the tutorials homework assignments previously provided will be worked through and ‘ideal’ solutions provided to them. The tutorials will also provide you with an opportunity to query regarding material in the course.  

Learning Outcomes:

On successful completion of this course, students will be able to:

1. Evaluate the corporate governance structure of a company
2. Understand how financial markets and institutions channel savings to corporate investment
3. Understand the traditional theories of the term structure of interest rates
4. Evaluate the financial health of a company
5. Analyze investments using advanced investment appraisal techniques
6. Measure the relationship between risk and return using advanced pricing models.
7. Describe the role of debt ratings in capital structure policy
8. Compare theories of dividend policy and explain implications of each for share value, given a description of a corporate dividend action.
9. Work effectively as an individual and in multi-cultural teams
10. Communicate effectively in oral and written modes in professional and academic settings

Textbooks and Required Resources:

Recommended textbook:

Fundamentals of Corporate Finance, 4th Edition: David Hillier, Stephen Ross, Randolph Westerfield, Bradford Jordan (hereafter Hiller). ISBN: 978 - 1526848628

Additional textbook: 1. Principles of Corporate Finance, 13th Edition: Brealey, Myers, Allen (hereafter BMA). ISBN: 978 – 1 – 260 – 56555 – 3

Please refer to blackboard for further readings.

Assessment:

• An assignment (30% of the grade) Please refer to blackboard for further assessment information.
• An individual examination (70% of the grade) in the examination period.