Finance 2 builds on Finance 1. The course covers many issues of relevance to the financial manager, such as portfolio theory, asset valuation, market efficiency, risk management, capital structure, cost of capital, dividend policy and corporate takeovers.

Workshops: 2 hours x 10 weeks.

Tutorials: 1 hour of tutorials x 6 weeks.

Tutorial slots can be selected on MyCampus.

Course includes asynchronous learning activities

None

Finance 2 aims to consolidate and extend ideas introduced in Finance 1. By means of the concepts and analytical tools learned in Finance 1, the course introduces theories of valuation and capital structure, with an emphasis on their practical implementation and resulting implications. We extend the ideas of asset valuation and the EMH into the area of portfolio theory and investments with a first look at an asset pricing model (CAPM) and its real world implications. The course also brings about various special topics such as risk management, as well as mergers and acquisitions. After finishing this course, students are expected to have insights on crucial elements influencing the investment and financing decisions of a typical firm.

By the end of this course, students should be able to:

1. Understand and apply the concept of portfolio theory, diversification, the Capital Asset Pricing Model (CAPM) and the role it plays in modern.

2. Describe the nature and type of exposure associated with risk management such as interest rate risk, currency risk and exchange rate differences.

3. Understand derivative use and apply simple hedging techniques for protection against foreign currency and interest rate risk.

4. Understand and apply relevant corporate finance topics and concepts such as: optimal capital structure theory with reference to the work of Modigliani and Miller, the drivers of the firm's overall cost of capital, dividend policy theories and analyse the motives and tactics of mergers and acquisitions as the market for corporate control.

5. Communicate concepts clearly in writing.

The minimum requirement for the award of credits is the submission of at least 100% by weight of the course's summative assessment Further requirements may include monitored attendance at classes and examinations and completion of formative assessment. All such requirements shall be specified by the subject concerned; details will be available via Moodle. Normally no grade or credits shall be awarded to a candidate who has not met these requirements.