ICM311-Corporate Finance and Investment Banking

Module Provider: ICMA Centre
Number of credits: 20 [10 ECTS credits]
Level:7
Terms in which taught: Spring term module
Pre-requisites:
Non-modular pre-requisites:
Co-requisites: ICM331 Securities and Investments
Modules excluded:
Current from: 2023/4

Module Convenor: Dr Dina Ghanma
Email: dina.ghanma@icmacentre.ac.uk

Type of module:

Summary module description:

The module is designed to develop practical skills, essential for roles within corporations and financial advisory firms, that can be applied directly to the workplace. It provides a rigorous grounding on the practice of corporate finance and more specifically the long-term financial management decisions of the firm pertaining to investments, financing, and payout – and how they affect firm value. Along these lines, the module deals with how corporations are governed, optimal financing structures, payout policies, the processes involved in the issuance of public, private equity, and growing through inorganic investment (mergers and acquisitions). Participants will also learn how to utilise best-practice techniques for business valuation and financial modelling employed by financial advisors/investment banks as part of providing advice to corporations. The module is assessed via a bespoke investment banking pitch-book simulation challenge designed by the ICMA Centre. As part of this, students work as part of a team to produce a pitch-book and financial analysis for a real-life scenario/transaction as part of evaluating a company’s strategic alternatives. In addition to lectures and case-study-based seminars, the module also includes 2 x 1-day financial modelling and valuation training Masterclasses by Financial Edge, the company responsible for training the analysts of the leading four investment banks. Students that take active part in the Masterclasses will also receive a certificate of participation by Financial Edge, which they can include in their CV.

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Aims:

The module is designed to develop practical skills, essential for roles within corporations and financial advisory firms, that can be applied directly to the workplace.

Assessable learning outcomes:

By the end of the module, it is expected that the student will be able to:

• Critically discuss the ‘purpose’ of the corporation and trends in stakeholder capitalism;


• Recognise value-increasing corporate governance characteristics and latest trends in corporate governance;


• Explain the practical differences between financing alternatives and the associated processes involved in raising financing;


• Propose and defend a financing strategy for a real firm;


• Assess optimal capital structure and payout policy in the presence of market imperfections;


• Discuss the mechanisms, pros and cons for different forms of payout;


• Critically assess the scope and motives of merger and acquisitions (M&As), the pros and cons of alternative M&A financing methods, and value creation potential;


• Value a real corporation using best-practice valuation methods (DCF, Multiples, LBO);


• Design and build a comprehensive “pitch-book” for a real-life transaction, undertaking independent research analysis and employing financial modelling techniques;��


• Present a coherent investment story and strategic alternatives for a real company.

Additional outcomes:

The module also aims to encourage teamwork and communication skills via group case study discussions. Students will gain exposure to real corporate finance problems and analyse industry and company information from various sources including Bloomberg and Refinitiv Eikon. They will also learn to utilise spreadsheet-based best-practice financial modelling techniques.

Outline content:

• Objectives of the Firm and Stakeholder Capitalism


• Corporate Governance��


• Private and Public Equity


• The Capital Structure Decision��


• Payout Policy��


• Mergers and Acquisitions��


• Advanced Financial Modelling and Valuation


• Pitchbook Building

Global context:

The material in the module utilises examples from a number of real-life companies from around the world including East Asia, the US, the UK, and the EU.

Brief description of teaching and learning methods:

Lectures are designed to offer a practical understanding of the topics. Seminars will be used to discuss problem sets and case studies. There will be 7 x 2-hour lectures, 8 x 1-hour seminars, and 2 x 6-hour Masterclasses��at the end of the Spring Term.

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Summative assessment- Examinations:

Summative assessment- Coursework and in-class tests:

1.5-hour mid-term test due in week 8-9 of the Spring Term: 40% of the total final assessment mark

4,000 word group project (pitch-book) due in week 2-3 of the Summer Term: 60% of the total final assessment mark.��20% of the group mark would be subject to peer evaluation penalties.

Formative assessment methods:

Penalties for late submission:

Penalties for late submission on this module are in accordance with the University policy. Please refer to page 5 of the Postgraduate Guide to Assessment for further information:

Assessment requirements for a pass:

A minimum total mark of 50% for the module

Reassessment arrangements:

Through individual project to be submitted in August of the same year.

Additional Costs (specified where applicable):

Required textbooks��

While this module does not require you to buy the textbook (recommended is Corporate Finance, 4th Edition, ISBN10: 1526848082, ISBN13: 9781526848086, by David Hillier, Stephen A. Ross, Randolph W. Westerfield, Jeffrey Jaffe, and Bradford D. Jordan), the lecture notes are heavily supplemented with reading from reputable business publications. Some of these, like the Financial Times and Harvard Business Review, are available through the university, but some others, like the Wall Street Journal, may require a modest subscription fee.

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Last updated: 14 April 2023