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Strategic financial management

PAM004

This module is offered on the MSc in Professional Accountancy.

This module is designed to build on professional accountancy papers to offer a route to a master’s-level qualification, incorporating accredited prior learning of professional papers benchmarked at level 7 master’s-equivalent.

This module is recognized by ACCA as equivalent to an option paper at professional level for students who achieve a pass.

This module will consider a range of major strategic financial issues of importance to company financial officers (FDs and CFOs) and other financially-oriented corporate senior managers, in addition to managers and analysts involved or interacting with finance-related activities and decisions. In so doing it blends core principles of financial management with business strategy.

Topics covered

  • The finance function, financial objectives and financial markets
  • Measuring "value" in business
  • Financial performance evaluation. The dividend decision
  • Re-visiting investment appraisal techniques
  • Investment appraisal – theory, practice and complications
  • Risk in investment appraisal. "Real" options
  • Portfolio theory and the capital asset pricing model
  • Stock exchanges
  • Financing
  • Corporate bonds
  • Cost of capital – theory and practice
  • Capital structure
  • Investment and financing interactions
  • Business valuation
  • Mergers and acquisitions
  • Treasury risk management
  • Financial derivatives
  • Interest rate risk
  • Foreign currency risk
  • Foreign direct investment

Learning outcomes

If you complete the course successfully, you should be able to:

  • understand how to formulate a financial strategy taking account of a range of stakeholders and their interests and differing financing options
  • identify and critique a range of investment appraisal techniques, select as appropriate and apply within the investment appraisal process, and make a justifiable recommendation
  • explain the nature and significance of financial risk and uncertainty, and apply techniques to take account of these, including diversification, Capital Asset Pricing Model (CAPM) and the Black-Scholes Option Pricing model
  • understand the implication of differing types of capital structure and their implications for cost of capital and associated decisions
  • understand and critique both the theoretical issues and influences on practical decisions associated with the development of dividend policy
  • identify and discuss the drivers for mergers and acquisitions, the calculation of share valuation, and identify and critique the main forms of purchase consideration used
  • understand the drivers for financial restructuring and the consequences for liquidity and financing requirements
  • identify and describe the key financial risks facing a business, explain and demonstrate how financial instruments can be used to manage the financial risks within an appropriate risk strategy.
  • think critically and creatively in identifying, evaluating, and critically appraising alternative solutions to business problems
  • solve complex problems to support financial decision making
  • the ability to undertake research into a financially related business problem and to apply skills in the assembling and analysis of data collected
  • synthesise and use information and knowledge effectively.
  • numeracy and quantitative skills applied to financial evaluations and business management decisions     
  • critical self-reflection applied to business practice and experience
  • effective communication of complex solutions to business related decisions
  • effective use of information technology
  • high personal effectiveness, applying critical self-awareness and personal resource management in the context of a diverse business environment

Assessment

This module is assessed by:

Coursework (30%)

Examination (70%)

Essential reading

The following is provided as part of the course materials after you register:

  • Corporate Financial Management 5th edition eTextbook, Glen Arnold, Published by Pearson, Jan 2013, eTextbook, ISBN13: 9780273780625, ISBN10: 027378062X
  • Corporate Finance and Investment. Decisions and Strategies 7th Edition, R Pike and B Neale & P Linsley, Published by Pearson, 2012 eTextbook, ISBN: 9780273763468