BSc Management (Marketing) with Industrial/Professional Experience / Course details

This course unit aims to develop and extend the fundamental concepts of modern finance theory that were introduced in the first year. It aims to provide an intermediate understanding of core asset pricing models and associated theoretical and empirical issues. Further, the course unit develops an understanding of capital budgeting, the use of real options to evaluate investment decisions, and issues concerning corporate capital structure and dividend decisions. 

BMAN10522/10522(M) or BMAN10552 (with a pass mark of 60% or above). Only available to: Mgt/Mgt (specialism); IM, IMABS and BSc Accounting.

Pre-requisites:

BMAN10522/10522(M) Financial Decision Making with a pass mark of 40% or

BMAN10552 Fundamentals of Finance with pass mark of 60% or above

Co-requisites: None

Dependent course units: BMAN20072, BMAN30060, BMAN30071, BMAN30091, BMAN30111, BMAN30242, BMAN30251, BMAN30702, BMAN30190 only available to BSc Management (A+F) - provided students have taken and passed BMAN23000(B), BMAN20072 and BMAN20081
 

This course unit aims to develop and extend the fundamental concepts of modern finance theory that were introduced in the first year. It aims to provide an intermediate understanding of core asset pricing models and associated theoretical and empirical issues. Further, the course unit develops an understanding of capital budgeting, the use of real options to evaluate investment decisions, and issues concerning corporate capital structure and dividend decisions. 
 

The first semester covers:  
1. Time value of money 
2. Valuation concepts: 
- capital budgeting and corporate investment decisions including the significance of the Net Present Value criterion; 
- bond valuation; 
- stock valuation; 
3. risk and return concepts: 
- optimal portfolio analysis; 
- the capital asset pricing model; 
- alternative models of systematic risk; 
The second semester covers:
1. Capital budgeting and risk: 
- estimating cost of capital; 
- cost of equity, cost of debt, and Weighted Average Cost of Capital (WACC); 
- capital budgeting under uncertainty; 
2. Options 
3. Financing decision: 
a. Capital Structure Theories 
b. Equity and Debt Financing Decisions; 
4. Distribution decision and dividend policy; 
5. Real options; 
6. Currency risk Measurement and Management; 
7. Interest rate risk and mergers and acquisitions; 

The course consists of 34 lectures, split across two semesters. These lectures will be delivered on campus. Moreover, there will be a total of 17 workshops split across two semesters. 
Total study hours: 200 hours split between lectures, workshops, homework, reading, self-study and preparation for classes and examinations.

1. Lectures-on-campus, in class

These contain the core of the course material. Each week two hours of synchronous lecture will delivered on campus which will later be made available for you to view via the course Blackboard page. In the weekly lectures, we will introduce the topic(s) of the week, and identify the relevant questions from workshop, homework, and training sessions for you to practice with. 
These will be conducted on-campus, in class. Each session will 2 hours.  

There will be 8*2=16 hours of synchronous lectures in semester 1  
There will be 9*2=18 hours of synchronous lectures in semester 2  

2. Workshop – on-campus, in class

In the workshop sessions, we will answer questions on the week’s material and will present the solutions of some of the most difficult parts of homework.  
These will be conducted on-campus, in class. Each session will last one hour.  

There will be 8*1=8 hours of synchronous workshops in semester 1  
There will be 9*1=9 hours of synchronous workshops in semester 2  

3. Homework, asynchronous

Together with each lecture material, lecturers will give students a small number of practical exercises for the following week that should summarize the main concepts discussed during the lecture. All the homework exercises will be available on Blackboard.  

• apply different capital budgeting techniques to critically evaluate investment projects. 
• explain how financial markets determines the prices of different types of financial securities such as stocks, bonds, and derivatives. 
• explain theories and models related to risk and return and estimate securities' risk and return. 
• compute the cost of capital of a firm under alternative assumptions and explain its use in project valuation and capital budgeting.  

• critically evaluate different theories and their implications for capital structure, payout policy and corporate financing decisions. 
• critically evaluate strategies to manage foreign currency exposure and interest rate risk faced by a firm.  
• discuss the key drivers and valuation considerations in mergers and acquisitions (M&A). 

• improve teamwork abilities by working cooperatively and effectively on group-based coursework.

• develop financial analysis and decision-making skills by critically interpreting empirical evidence. 
• gain experience in collecting financial data using financial database, e.g., WRDS and developing Excel skills for Finance 

Formative:
Training sessions in both Semester 1 and Semester 2

Summative:
Semester 1 examination (40%)
Semester 2 examination (40%)
Group-based coursework assignment (20%)

For exchange students who leave AMBS in December and will not return in January for examinations, an essay will be assigned. 

Formative:
Feedback is provided instantly through Blackboard.  

Summative:
At the end of Semester 1 Exam, through written feedback
At the end of Semester 2 Exam, through written feedback
Written feedback provided to each group (Group-based coursework assignment)

The main textbook for the course is
Berk,J. and DeMarzo P. (2023). Corporate Finance. Pearson Global Edition (Sixth edition) OR
Berk,J. and DeMarzo P. (2019). Corporate Finance. Pearson Global Edition (Fifth edition) OR
Berk,J. and DeMarzo P. (2016). Corporate Finance. Pearson Global Edition (Fourth edition) OR
Berk,J. and DeMarzo P. (2013). Corporate Finance. Pearson Global Edition (Third edition) OR
Berk,J. and DeMarzo P. (2010). Corporate Finance. Pearson Global Edition (Second edition) OR
Berk,J. and DeMarzo P. (2007). Corporate Finance. Pearson International Edition  

(Please do not buy “The Core” edition, as it doesn’t cover all the material of semester 1 and 2).

This text will underpin the majority of the topics covered in the lectures and workshops in both semesters of the course (see course schedule).  

For 2024/25, the Library has provided all students with a personal downloadable copy of the eTextbook of the 6th edition for this module, access will be available when teaching starts for this unit. You will be required to register for a Kortext account using your UoM email address, however please use a different password. Please choose University of Manchester from the drop-down list when prompted

There will be also numerous copies (both “normal”-loan and “short-loan”) in the library and also numerous e-copies available at the Library as well.  

You may also wish to consult some of the many other corporate finance textbooks that cover the topics listed here (copies of other textbooks are available in the University library).

Pre-requisites:

BMAN10522/10522(M) Financial Decision Making with a pass mark of 40% or
BMAN10552 Fundamentals of Finance with pass mark of 60% or above

Co-requisites: None

Dependent course units: BMAN20072, BMAN30060, BMAN30071, BMAN30091, BMAN30111, BMAN30242, BMAN30251, BMAN30702, BMAN30190 only available to BSc Management (A+F) - provided students have taken and passed BMAN23000(B), BMAN20072 and BMAN20081.

Programme Restrictions: IMABS, IM, Mgt, MAM, Accounting and AMAIS only.

BMAN23000(B) is also available to BA Modern Languages with Business and Management provided the pre-requisite BMAN10552 Fundamentals of Finance has been passed with a mark of 60% or higher.

BMAN23000(B) is available to study abroad and exchange students admitted through the University of Manchester International Programmes Office who will be studying for a full academic year.

For Academic Year 2025/26
Updated: March 2025
Approved by: March UG Committee