Principles of Finance (BUST08003)
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Visiting students must have completed at least 1 introductory level Business Studies course at grade B or above for entry to this course. This course cannot be taken alongside Economics 1 (ECNM08013), Economic Applications (ECNM08003) or Economic Principles (ECNM08004). We will only consider University/College level courses.
The course aims to develop in students an understanding of the basic principles of finance. It builds on the introduction to finance provided in Foundations of Business. The course has a quantitative slant, and is designed to give a theoretical introduction to financial markets and company finance policies. It is a prerequisite for finance Honours courses.
The course looks at the way assets are valued in financial markets. It considers interest rates and the pricing of fixed-income bonds; stock market prices and returns; stock market risk and the influence of risk on the pricing of shares; and the characteristics and pricing of financial futures and options. The course also covers some aspects of company finance theory. These include business investment decisions, sources of finance, the cost of capital, the financial structure decision and the dividend decision. SYLLABUS: Prices and Returns in Financial Markets. Financial decision making. Price of a stream of cash flows. Bond prices. Stock prices. Option prices. Risk and return. Company Financial Decisions. Introduction to corporate finance. The capital budgeting decision. Sources of finance. Cost of capital. Capital structure. Dividend policy. STUDENT LEARNING EXPERIENCE: The students are introduced to the topics in lectures. The topics are then related to particular situations in tutorials, thereby showing how principles apply in practice. The coursework assignment requires students to analyse and discuss a particular issue using their own judgement where relevant.
Written Exam 80%, Coursework 20%, Practical Exam 0%
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