Management Science and Innovation

MSIN3017 - Corporate Financial Strategy

This module provides an introduction to some of the key principles, practices and analytical approaches involved in corporate finance today. As such it addresses and considers issues encountered by company Finance Directors (FDs) and Chief Financial Officers (CFOs), and middle to senior managers in setting and managing
strategies for corporate finance.

It considers a range of relevant aspects including the development of company-wide financing plans from salesprojections, growth objectives and forecasts of cash requirements and internal funds generation; the pricing of debt and equity instruments; optimal capital structure; the assessment of an appropriate level of gearing (leverage) to support company growth objectives; the application of financial analytical judgment to project and
capital expenditure (CAPEX) decisions, in systematic and consistent manner; the complexities of dividend payouts, debt stand-by arrangements, Initial Public Offerings (IPOs), share repurchases, and rights offerings;
and the development of responses to stressful financial situations, such as cash shortages, breaches of loan covenants and possible bankruptcy.
Prior accounting/finance studies are not presumed. Successful completion of this module will result in having gained insights into and approaches to the valuation of businesses and processes for mergers, acquisitions and
takeovers. It is offered in Term 1 as an option/elective, as appropriate, on eligible Programmes in UCL. The module organiser is Peter Clark from Department of Management Science and Innovation, UCL.

Lectures & Seminars

Lectures: 10 lectures x 2 hours Mondays 14.00 – 16.00
Seminars: 9 workshops x 1 hour Monday 16.00 – 17.00 or Tuesday 14.00 – 15.00.
Lectures commence on 4 October 2010.

Module Assessment Summary

100% of the marks are awarded on the basis of examination result. The examination is held in the Summer Term
and is unseen, and of 3 hours duration. 

Outcomes

A successful student will have gained an appropriate knowledge and understanding of:

  •  Developing company-wide financing plans from sales projections, growth objectives and forecasts of cash requirements and internal funds generation
  •  Pricing debt and equity instruments utilising the Capital Asset Pricing Model (CAPM), towards and objective of developing an ongoing optimal capital structure
  •  Assessing the company’s appropriate, sustainable level of gearing (leverage) to support company growth objectives
  •  Applying financial analytical judgment to project and capital expenditure (CAPEX) decisions, in systematic and consistent manner
  •  Decisions concerned with when, whether and how to proceed with: dividend payouts, debt stand-by arrangements, Initial Public Offerings (IPOs), share repurchases, rights offerings
  •  Developing responses to stressful financial situations, such cash shortages, breaches of loan covenants and possibly even possible bankruptcy.

Module Textbooks

Brealey, R., Myers, S. and Marcus, A. (2009). Fundamentals of Corporate Finance Sixth Edition. New York, McGraw-Hill Irwin, ISBN 978-0-07-712-3321.

Mills, R.W. (2007). Financial Statement Analysis and Corporate Finance: Principles and Applications, First Edition, Book 1 (ISBN 978-1-906156-03-9) and Book 2 (ISBN 978-1-906156-04-6) Value Focus Publishing.
NOTE: THIS IS COMPRISED OF TWO PAPERBACK EDITIONS, BOOKS 1 & 2.