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FINN3011: Financial Theory and Corporate Policy

Please ensure you check the module availability box for each module outline, as not all modules will run in each academic year. Each module description relates to the year indicated in the module availability box, and this may change from year to year, due to, for example: changing staff expertise, disciplinary developments, the requirements of external bodies and partners, and student feedback. Current modules are subject to change in light of the ongoing disruption caused by Covid-19.

Type Open
Level 3
Credits 20
Availability Available in 2023/24
Module Cap None.
Location Durham
Department Finance

Prerequisites

  • Microeconomics (ECON2021)

Corequisites

  • None

Excluded Combinations of Modules

  • None

Aims

  • This module aims to:
  • provide students with theoretical knowledge and understanding of key selected theories in finance and corporate policy decisions by building on the knowledge and skills acquired at level 2.
  • familiarise students with selected empirical issues and methods of analysis of corporate financial decisions within the broader framework of financial theories.

Content

  • Expected utility, stochastic dominance and state-preference theories.
  • Mean-Variance criteria and portfolio theory.
  • CAPM, CCAPM and APT.
  • Asymmetric information and agency theory.
  • Capital structure.
  • Dividend policy.
  • Corporate governance

Learning Outcomes

Subject-specific Knowledge:

  • At the conclusion of this module students should have:
  • knowledge and understanding of theoretical issues relating to corporate financial policy decision.
  • had the opportunities to appreciate the applications in corporate financial policy decisions drawing on recent research.

Subject-specific Skills:

  • At the conclusion of this module students should be able to apply their knowledge in decision making, in corporate financial policy and they should therefore also be able to critically judge the extent of each major financial policy decision on the wealth of the firm and solve relevant problems.

Key Skills:

  • Written Communication - through summative assessment.
  • Planning and Organising - by observing the strict assignment deadlines and by preparing for the examination.

Modes of Teaching, Learning and Assessment and how these contribute to the learning outcomes of the module

  • Teaching is by lectures and seminars. Learning takes place through attendance at lectures, preparation for and participation in seminar classes, and private study.
  • Formative assessment is by means of an essay.
  • Summative assessment is by means of a written examination and an assignment.

Teaching Methods and Learning Hours

ActivityNumberFrequencyDurationTotalMonitored
Lectures201 per week1 hr20 
Seminars84 in term 1, 4 in term 21 hr8 
Revision Lecture22 in term 31 hr2 
Preparation and Reading170 
Total200 

Summative Assessment

Component: AssignmentComponent Weighting: 30%
ElementLength / DurationElement WeightingResit Opportunity
One written assignment2000 words max100same
Component: ExaminationComponent Weighting: 70%
ElementLength / DurationElement WeightingResit Opportunity
Written online exam 2 hours100same

Formative Assessment

One 1500 word essay

More information

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