Principles of Finance
Module code: EC2022
Module co-ordinator: Dr Andre Stenzel
Main Purpose
How often should you replace your car? Should you lease a car or purchase it outright? Should you undertake further investments in your education? The Principles of Finance module will help you make such decisions and can be easily extended to making decisions for businesses where the replacement, leasing and investment decisions may be made about fleets of vehicles or aircraft. Having made a decision to invest, the module also considers under what conditions it would make a difference to a company whether the investment is financed by issues of bonds or equity? Such decisions lie at the heart of corporate finance.
The module also discusses the surprising results that all investors should hold the same portfolio of financial assets and their portfolios should only differ in the proportion of the risk free asset. The Principles of Finance module will explain how these results are derived and why, despite this result, a multitude of distinct investment vehicles, such as commodity funds and emerging market funds, are offered to investors.
Topics Covered
- Project appraisal and capital budgeting
- The determinants of the cost of capital
- Portfolio theory
Learning
-
20 one hour lectures
-
5 one hour tutorials
Assessment
The module is worth 15 credits towards your second year assessment. This module will be assessed in the following format:
- 80% weighted final exam
- 20% weighted mid-term test