Fundamentals of Finance

Module description

What is the module about?

The aim of the module is to provide students an overview of important topics in corporate finance. On completion of the module, students will have studied:

• The mechanisms of discounting
• The value of bonds and common stocks
• The links between risk and return, risk and the cost of capital
• Portfolio Theory and the Capital Asset Pricing Model
• The implications of the firm’s capital structure
• Market efficiency and behavioural finance

Please note that this is a technical module drawing heavily on mathematical techniques, although at moderate level. Students adverse to math might not do too well in the assessment. The module will require several hours of additional weekly self-study to cover the weekly readings and assignments.

Who should do this module?

It is aimed at understanding some of the important corporate finance decisions.

Provisional Lecture Outline

Topic 1: Introduction to Corporate Finance

Topic 2: Present and future values, perpetuities, and annuities

Topic 3: Interest rates and Bond valuation

Topic 4: The Value of Common Stocks

Topic 5: Risk and Return

Topic 6: Capital Asset Pricing Model

Topic 7: Cost of Capital

Topic 8: Market Efficiency & Behavioural Finance

Assessment details

70% Examination

2 x 15% Mid-term test

The format of the examination has not yet been confirmed. All students will be expected to sit any remote exams in January, but semester 1 only students will be set an alternative assessment in lieu of any in-person exams

Teaching pattern

Weekly Lecture

Fortnightly Tutorial

Suggested reading list

Key text or background reading

Brealey, R., Myers, S. and Allen, F., Principles of Corporate Finance, 13th Global Edition, McGraw-Hill Irwin, 2019. (Lectures cover some chapters of the BMA textbook).

Supplementary Readings

Berk, J., and P. DeMarzo, Corporate Finance, Global Edition, 4/E, Pearson Education.

Bodie, Kane, and Marcus, Investments, 12th Edition, Irwin/McGraw-Hill.

Ross, Westerfield, Jordan, Fundamentals of Corporate Finance, 12th Edition, McGraw-Hill.

Module description disclaimer

King’s College London reviews the modules offered on a regular basis to provide up-to-date, innovative and relevant programmes of study. Therefore, modules offered may change. We suggest you keep an eye on the course finder on our website for updates.

Please note that modules with a practical component will be capped due to educational requirements, which may mean that we cannot guarantee a place to all students who elect to study this module.

Please note that the module descriptions above are related to the current academic year and are subject to change.