This module aims to:

Develop students’ knowledge and understanding of corporate finance and accounting theory;

Provide students with an advanced understanding of the complexities involved with the main theories developed in corporate finance and accounting research literature.

(LO1) Students will be able to demonstrate knowledge and understanding at an advanced level of a range of corporate finance and financial accounting theories.

(LO2) Students will be able to demonstrate an advanced understanding of and interpret the main elements in the field of corporate finance and financial accounting.

(LO3) Students will be able to demonstrate a critical awareness of theoretical studies in the fields of corporate finance and financial accounting.

(LO4) Students will be able to communicate research ideas and empirical results in a succinct and clear manner.

(LO5) Students will be able to demonstrate a critical awareness of how theory and practice apply to specific issues in corporate finance and financial accounting.

(S1) Organisation skills
This will be evident in the students’ independent management of their assignments and coursework and by meeting coursework deadlines.

(S2) Problem solving and decision making
Students will be challenged to think critically about organisational issues and dilemmas. They will do this by gathering and synthesising information, analysing alternative perspectives and options and presenting a considered opinion or course of action in their course assessment.

(S3) Teamwork and leadership
Students will work in teams to develop a conceptual understanding of problems and issues. In doing so, they will gain experience in negotiation, persuasion, influencing and managing conflict.

(S4) Communication skills
Students will develop oral communication skills through presentations and written communication skills in their assignment.

(S5) Ethical awareness
Students will develop ethical awareness by understanding issues related to accountability, governance and corporate social responsibility.

(S6) International awareness
International issues will be covered in related group and individual activities.

(S7) Digital skills
Students will have opportunities to improve their digital skills. Students will demonstrate skills in the use of software applications and digital methods including word processing and using the internet and other digital platforms for information searches in the course of researching and presenting coursework.

Lectures x 24 hours (2 hours per week)

Seminars x 12 hours (1 hour per week consisting of presentations and group discussion)

Self-directed learning x 164 hours
Self-directed learning hours will be spent on class preparation and revision of the weekly topics and research activity in preparation for in-class presentations and coursework, and reflecting on the implications for own research.

Introduction to Corporate Finance and Financial Accounting Theory (Tirole, Ch. 1; Scott, 1 and 2)

Decision-Usefulness of Accounting: Information Approach and Measurement Approach (Scott, Ch. 3-4 and 6):
Usefulness of accounting numbers to investors
Fair value accounting

Conflicts of Interest in Accounting (Scott, Ch. 8 and 9):
Efficient contracting theory
Agency Theory

Economic Consequences of Accounting Choices (Scott, Ch. 10 and 11):
Executive Compensation
Earnings Management

The Financing of Corporations (Tirole, Ch. 2-3 and 6):
Modigliani-Miller Propositions under Perfect Capital Markets and Taxes
Trade-off Theory: Financial Distress and Taxes
Pecking Order Theory

Cash holdings and Liquidity Management (Tirole, Ch. 5):
Theories on Optimal Cash Policy
Agency Cost of Free-cash Flow

Payout Policy (Franklin and Michaely, Handbook of Economics and Finance, Ch. 7):
Modigliani-Miller Irrelevance Propos ition
Role of Taxes and other Market Frictions
Agency, Dividend Signalling and Adverse Selection Models

Takeovers (Tirole, Ch. 11):
Positive Theory of Takeovers
The Payment Method Choice and Takeover Gains
Managerial Hubris (biases) and Empire-building Theory