ICM311-Corporate Finance and Investment Banking

Module Provider: ICMA Centre
Number of credits: 20 [10 ECTS credits]
Level:7
Terms in which taught: Spring term module
Pre-requisites:
Non-modular pre-requisites:
Co-requisites: ICM108 Fixed Income and Equity Investments
Modules excluded:
Current from: 2019/0

Email: g.alexandridis@icmacentre.ac.uk

Type of module:

Summary module description:

The main aim of the module is to provide a rigorous grounding of the theory and practice of corporate finance and more specifically the long-term financial management decisions of the firm pertaining to investments, financing and payout and how they affect its value. It deals with how corporations are governed, their financing structures, payout policies, the processes involved in the issuance of public and private equity, as well growing through inorganic investment (mergers and acquisitions). The module also deals with advanced financial analysis and enterprise valuation methods employed by financial advisors/investment banks. Students on this module take part in a bespoke investment banking pitch-book simulation challenge whereby they work with their team to produce a real life pitch-book including financial analysis on a real transaction as part of assessing the company’s strategic alternatives.

Aims:

To provide a rigorous grounding of the theory and practice of corporate finance and more specifically the long-term financial management decisions of the firm pertaining to investments, financing and payout and how they affect its value. The module also aims to provide an understanding of advanced financial analysis and enterprise valuation methods employed by financial advisors/investment banks.

Assessable learning outcomes:

By the end of the module, it is expected that the student will be able to:

• Recognise value increasing corporate governance characteristics and latest trends in corporate governance


• Critically discuss the main goals of a corporation, the impact of “short-termism” and responsible long-term value maximization.


• Explain the differences between financing alternatives and the associated processes involved


• Propose and defend a financing strategy for a real firm


• Assess optimal capital structure and payout policy in the presence of market imperfections


•  Understand the mechanisms and pros and cons for different forms of payout


• Discuss the most common types of mergers and acquisitions, their motives, alternative financing methods and value creation


• Value a real corporation using different valuation methods (DCF, Multiples, LBO)


• Build a comprehensive “pitch-book” including detailed financial analysis for a real life transaction

Additional outcomes:

The module also aims to encourage teamwork and communication skills via case study methods and group discussion. Students will get exposure to real corporate finance problems and analyse industry and company information from various sources including Bloomberg and Refinitiv Eikon.

Outline content:

• Objectives of the Firm, Agency problems and Corporate Governance (DSRJB Chapters 1 & 2)


•  Financing Alternatives and Issuing Securities (DSRJB Chapters 19 & 20)


• The Capital Structure Decision (DSRJB Chapters 15, 16 & 17)


• Payout Policy (DSRJB Chapter 18)


• Mergers and Acquisitions (DSRJB Chapter 28)


• Advanced Financial Modelling and Valuation


• Pitchbook building

Global context:

The module makes extensive use of examples and cases from a number of different markets including but not limited to the UK, US, EU and China.

Brief description of teaching and learning methods:

Lectures are designed to offer a practical understanding of the topics

Seminars will be used to discuss non-assessed problem sets and case studies. Practical classes are designed to provide rigorous spreadsheet based training in financial modelling and valuation

Summative assessment- Examinations:

Summative assessment- Coursework and in-class tests:

2 hour mid-term exam: 40% of the total final assessment mark

4,000 word group project: 60% of the total final assessment mark (20% of this mark is based on group peer evaluation)

Formative assessment methods:

Penalties for late submission:
Penalties for late submission on this module are in accordance with the University policy. Please refer to page 5 of the Postgraduate Guide to Assessment for further information: http://www.reading.ac.uk/internal/exams/student/exa-guidePG.aspx

Assessment requirements for a pass:

A minimum total mark of 50% for the module

Reassessment arrangements:

Through individual project to be submitted in August of the same year.

Additional Costs (specified where applicable):

Last updated: 8 April 2019