ECO-20051 - Finance 2
Coordinator: Xinyu Yu Tel: +44 1782 7 33106
Lecture Time: See Timetable...
Level: Level 5
Credits: 15
Study Hours: 150
School Office: 01782 733094

Programme/Approved Electives for 2020/21


Available as a Free Standing Elective





ECO-20007 Finance 1

Barred Combinations


Description for 2020/21

In this module students will learn how companies make financial decisions regarding capital expenditure on their activities, and the sources of finance to support these activities. You will learn the alternative techniques of capital investment appraisal and their theoretical underpinning. You will learn the many ways in which risk can be captured in this decision making process. You will learn the theories and practical considerations that determine the choice between bonds and shares for financing corporate activity and the role of taxes and bankruptcy risks in this choice. You will learn how firms determine how to reward their shareholders from their earnings. This module (in combination with Finance 1) provides students with the opportunity to gain the knowledge and skills in finance and financial markets recognised and accredited by Finance and Accounting professional bodies.

By building on the introduction to finance provided by 'Finance 1', the aim of this module is to provide students with an understanding of financial decision making in the context of a company and in the face of economic uncertainty.

Intended Learning Outcomes

Understand the scope of corporate finance: 1
Undertake and explain the advantages and disadvantages of alternative methods of capital investment appraisal by firms: 1,2
Apply techniques of investment appraisal under capital rationing: 1,2
Understand the assumptions underlying and the consequences of the separation of investment and financing decisions by companies: 1
Demonstrate how project appraisal techniques should be adjusted for risk and missing information: 2
Interpret and estimate the components of the WACC (weighted average cost of capital): 2
Understand how and when to use scenario analysis, sensitivity analysis, break-even analysis and decision trees in the evaluation of corporate investment decisions: 2
Demonstrate an understanding of the theory and evidence regarding corporate capital structures: 2
Demonstrate an understanding of the theory, consequences and evidence regarding corporate payout decisions: 2

Study hours

Lectures: 20
Tutorials: 4
Class test: 2
Final exam: 2
Tutorial preparation: 24
Class test preparation: 12
Self study and final exam revision: 86

School Rules

ECO-20007 Finance 1

Description of Module Assessment

1: Computer Task weighted 35%
Computer-based test
1.5 hour computer-based test of short answer questions, multiple choice questions, or both. The test will comprise up to 40 multiple choice questions.

2: Exam weighted 65%
Take-away Exam
Assessment 2 is a take-away exam which will be available on KLE for 24-hours to answer and submit your answer via Turnitin File. Although students have been given significant time to complete this exam script, we expect most students to spend no more than 3 hours to complete and submit their answers via Turnitin (with a maximum of 2,000 words). Answers should be as accurate and concise as possible.This take-away Final exam is a combination of short and long answers, with a mix of calculations and analysis, interpretation and explanation. Choice of 4 questions from a set of 7 or 8 questions.