CB3410 Financial Management

Part I

Course Duration: One Semester
Credit Units: 3
Level: B3
Medium of Instruction: English
Prerequisites: Nil
Precursors:
CB2100 Accounting I or FB2100 Accounting I
CB2400 Economics I or FB2400 Economics I
Equivalent Courses: Nil
Exclusive Courses:
EF3010 Financial Management for Value Creation
FB3410 Financial Management


Part II

Course Aims:

This course aims to provide students with a background in some fundamental concepts of modern financial management. It also exposes students to some of the major financial decision techniques used in the business world. Students will develop their attitude and ability to discover and innovate by applying the basic principles of finance to solving real-life financial problems independently, such as evaluating a capital budgeting decision or estimating the value of a company using different methods.

Course Intended Learning Outcomes (CILOs)
Upon successful completion of this course, students should be able to:

No.

CILOs

Weighting
(if applicable)

CILO 1

Apply the concepts of time value of money and risk-return trade-off for valuation of stocks, bonds, and estimating cost of capital; demonstrate ability to discover mispriced financial instruments;

50%

CILO 2

Evaluate corporate investment decisions using various capital budgeting techniques;

25%

CILO 3

Appraise various sources of financing available to corporations and evaluate capital structure decisions and examine values of levered and unlevered firm, and dividend policy.

25%


Teaching and Learning Activities (TLAs)
(Indicative of likely activities and tasks designed to facilitate students’ achievement of the CILOs. Final details will be provided to students in their first week of attendance in this course)

CILO No. TLAs
CILO 1, 2, 3 Lectures, exercises and in-class discussions.
Lecturer encourages students to think critically and logically by getting students to solve the problems by themselves rather than giving out the solutions without engaging students.
CILO 1, 2 Stock Valuation or Capital Budgeting Group Project/Case Study


Assessment Tasks/Activities

(Indicative of likely activities and tasks designed to assess how well the students achieve the CILOs. Final details will be provided to students in their first week of attendance in this course)

Final examination: 50% (2-hour duration)
Mid-term exam, group project and exercises 50%

Students are required to pass both coursework and examination components in order to pass the course.


Grading of Student Achievement :


Letter Grade Grade Points Grade Definitions

Remarks

A+
A
A-
4.3
4.0
3.7
Excellent Strong evidence of creative and critical thinking; good organization, capacity to analyze and synthesize; superior grasp of subject matter; evidence of extensive knowledge base;
B+
B
B-
3.3
3.0
2.7
Good Evidence of grasp of subject; some evidence of creative and critical thinking and analytical ability; reasonable understanding of issues; evidence of familiarity with literature.
C+
C
C-
2.3
2.0
1.7
Adequate Student who is profiting from the university experience; understanding of the subject; some ability to develop creative solutions to problems.
D 1.0 Marginal Sufficient familiarity with the subject matter to enable the student to progress without repeating the course; marginal evidence of creative and critical thinking.
F 0.0 Failure Little evidence of familiarity with the subject matter; weakness in analytic skills; limited or irrelevant use of literature, little or no evidence of creative and critical thinking.


Part III

Keyword Syllabus:

  1. Introduction to Finance: basic accounting (income statement, balance sheet, cash flow analysis), goal of the firm, agency costs, basic structure of Hong Kong financial and banking systems.
  2. Time value of money: determinants of interest rates, future value and present value of cash flows.
  3. Bond Valuation.
  4. Risk and return, efficient capital markets.
  5. Stock Valuation.
  6. Financial Statement Analysis.
  7. Financing avenues for a firm – Initial Public Offerings (IPOs), equity fund raising, short-term and long-term debt, venture capital, external fund raising and cash flow analysis.
  8. Cost of Capital.
  9. Capital budgeting under uncertainty: Net Present Value, Internal Rate of Return, Investment Decisions.
  10. Capital Structure.
  11. Dividend Policy.

Related Links
Department of Economics and Finance