Topics covered in the module provide students with a foundation for other subjects and a foundation of professional-specific skills and knowledge. Students are expected to learn and understand Business Finance in the context of integrated business environment. They will be able to analyses the financial function in business and its strategic role in corporate management. They will also develop strong analytical skills and critical thinking.
On successfully completing this subject, students will be able to:
Describe the major function of financial managers;
Compare investment appraisal techniques and understand the limitations of those sequences;
Evaluate the various sources of finance available in Hong Kong;
Examine the factors affecting capital structure and dividend policy and their effect on the cost of capital;
Interpret the key characteristics of working capital and its individual elements;
and Demonstrate how risk and uncertainty affects investment returns.
Introduction Firm’s goals and objectives.
Time value of money.
Shares and bonds.
Cost of Capital
Definition and component of cost of capital.
Introduction to weighted.
Capital Investment
Techniques Payback.
Accounting rate of returns.
The internal rate of returns.
Net present value.
Comparisons of discounted cash flows techniques.
Projects with different lives and investment outlay.
Capital rationing.
Replacement decisions.
Investment Decisions under Uncertainty Mean-variance rule.
Sensitivity analysis and simulation.
Portfolio Theory Efficient frontier.
The capital market line.
Market price for risk.
Beta measurement.
The security market line.
Limitation of CAMP.
Sources of Finance Working Capital Management
Key issues related to each topic will be covered in mass lectures. Interpretation and application of concepts and techniques will be discussed and elaborated in tutorials. All students are expected to contribute to class discussion. A variety of assessment tools, including in-class exercises, presentations, quizzes, etc. Will be used.
