REMB31: Corporate Finance

Module code: REMB31

Module provider: Real Estate and Planning; Henley Business School

Credits: 20

Level: Postgraduate Masters

When you'll be taught: Semester 1

Module convenor: Professor Gianluca Marcato, email: g.marcato@henley.reading.ac.uk

Pre-requisite module(s):

Co-requisite module(s):

Pre-requisite or Co-requisite module(s):

Module(s) excluded:

Placement information: na

Academic year: 2024/5

Available to visiting students: No

Talis reading list: Yes

Last updated: 28 May 2024

Overview

Module aims and purpose

Thismodule presents concepts of real estate finance,both theoretically and empirically. Itcan be seen asa course in corporate finance (funding and valuation) applied to real estate topics. It is particularly relevant for investment appraisal because it presents models to determine the discount rate in real estate investment decisions and it reconcilestypes of cash flows and discount rates to obtain investment values. 

Students will be able to demonstrate understanding of how financial issues influence decisions involving real estate within firms. They will show awareness of the problems that have to be overcome if real estate is to be treated on the same basis as other assets that are managed by companies. They will be able to extract information from company accounts and to understand the concepts of market efficiency as applied to property and the different approaches that can be taken to incorporate market perspectives into real estate management and decision making.In particular theywill understand the forms of financing available to real estate companies/funds and their relative costs. Finally, students will be able to apply formal models to determine discount rates to be used in investment appraisal. 

Module learning outcomes

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

• demonstrate a comprehensive understanding ofhow financial issues influence decisions involving real estate within firms; 
• rigorously analyse the capital structure of a firm and its weighted average cost of capital; 
• demonstrate a comprehensive understanding ofthe problems thathave tobe overcome if real estate is to be treated on the same basis as other assets that are managed by companies; 
• demonstrate a comprehensive understanding ofconcepts of market efficiency as applied to property,and the different approaches that can be taken to incorporate market perspectives into real estate management and decision making; 
• critically discuss the choices of target return required for real estate investments; 
• develop a comprehensive understanding ofthe forms of financing available to real estate companies andtheirrelative costs. 

Module content

Approaches to investment appraisal using financial techniques, capital budgeting and the use of the Weighted Average Cost of Capital.Financing decisions using different techniques to deal with property and other assets. How capital is raised and what the implications are for company decision makers. Modelling of cost of financing. Understanding company accounts, identifying capital structure and the role of real estate in influencing capital structure. Application of lease or buy decision analysis. 

Structure

Teaching and learning methods

The module will be delivered as a block release with on-line post module support. The block release teaching will compriseof lectures, seminars, presentations andproblem solvingcomputer workshops. Following the block session, further help will be provided via Blackboard. Assessment will include a multiple-choice test set during the module week. 

Study hours

At least 24 hours of scheduled teaching and learning activities will be delivered in person, with the remaining hours for scheduled and self-scheduled teaching and learning activities delivered either in person or online. You will receive further details about how these hours will be delivered before the start of the module.

Please note the independent study hours above are notional numbers of hours; each student will approach studying in different ways. We would advise you to reflect on your learning and the number of hours you are allocating to these tasks.

Semester 1 The hours in this column may include hours during the Christmas holiday period.

Semester 2 The hours in this column may include hours during the Easter holiday period.

Summer The hours in this column will take place during the summer holidays and may be at the start and/or end of the module.

Assessment

Requirements for a pass

Students need to achieve an overall module mark of 50% to pass the module.

As this is a core Module of Special Significance, students completing the MSc in Real Estate and MSc Real Estate Investment & Finance must achieve a mark of at least 40 in order to be awarded the MSc.

Students completing the IPF Certificate, IPF Diploma and/or MSc IPF Entry route must achieve a mark of at least 50 in order to obtain the IPF Qualification. 

Summative assessment

Penalties for late submission of summative assessment

The Support Centres will apply the following penalties for work submitted late:

Assessments with numerical marks

• where the piece of work is submitted after the original deadline (or any formally agreed extension to the deadline): 10% of the total marks available for that piece of work will be deducted from the mark for each working day (or part thereof) following the deadline up to a total of three working days;
• the mark awarded due to the imposition of the penalty shall not fall below the threshold pass mark, namely 40% in the case of modules at Levels 4-6 (i.e. undergraduate modules for Parts 1-3) and 50% in the case of Level 7 modules offered as part of an Integrated Masters or taught postgraduate degree programme;
• where the piece of work is awarded a mark below the threshold pass mark prior to any penalty being imposed, and is submitted up to three working days after the original deadline (or any formally agreed extension to the deadline), no penalty shall be imposed;
• where the piece of work is submitted more than three working days after the original deadline (or any formally agreed extension to the deadline): a mark of zero will be recorded.

Assessments marked Pass/Fail

• where the piece of work is submitted within three working days of the deadline (or any formally agreed extension of the deadline): no penalty will be applied;
• where the piece of work is submitted more than three working days after the original deadline (or any formally agreed extension of the deadline): a grade of Fail will be awarded.

The University policy statement on penalties for late submission can be found at: https://www.reading.ac.uk/cqsd/-/media/project/functions/cqsd/documents/qap/penaltiesforlatesubmission.pdf

You are strongly advised to ensure that coursework is submitted by the relevant deadline. You should note that it is advisable to submit work in an unfinished state rather than to fail to submit any work.

Formative assessment

Formative assessment is any task or activity which creates feedback (or feedforward) for you about your learning, but which does not contribute towards your overall module mark.

Reassessment

Additional costs