10 Credits SPRING

Pre-requisites: Entry requirements of the MBA, including three years' work experience. Good quantitative skills. Basic computer skills

Aims/Description: This module focuses on the principles underlying financial decision making. Finance directors make two major types of decisions, investment decisions and decisions on how to finance investment projects. Concerning investment decisions, the module reviews the determination of the cost of capital under uncertainty based on the Capital Asset Pricing Model (CAPM). In terms of financing decisions, the link between shareholder value on one side and financing choices (debt versus equity financing) and dividend policy on the other side is examined. The module also discusses the motives behind mergers and acquisitions as well as the potential and actual gains from such operations for both the bidder and target firms. Finally, the traditional approach to finance which assumes that securities are in general fairly priced is contrasted with a more recent approach which argues that psychological effects systematically bias investor behaviour and therefore cause persistent mispricings.

Restrictions on availability: Only available to MBA students.

Teaching Methods: Lectures, Seminars, Independent Study
Assessment: Formal Exam
WebCT resources are available for this module

Information on the department responsible for this unit (Management School):

Departmental Home Page
Teaching timetable


The content of our courses is reviewed annually to make sure it's up-to-date and relevant. Individual modules are occasionally updated or withdrawn. This is in response to discoveries through our world-leading research; funding changes; professional accreditation requirements; student or employer feedback; outcomes of reviews; and variations in staff or student numbers. In the event of any change we'll consult and inform students in good time and take reasonable steps to minimise disruption.

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Teaching methods and assessment displayed on this page are indicative for 2021-22. Students will be informed by the academic department of any changes made necessary by the ongoing pandemic.

Western Bank, Sheffield, S10 2TN, UK