This module aims to provide a sound knowledge of the analytical tools for financial management. It therefore focuses on the theory relating to investment and financial decisions. Practical issues are also considered. Topics covered may include portfolio theory, asset pricing theory, capital budgeting and investment rules and capital structure debate.

By the end of the module students should be able to:

• critically evaluate shareholders’ wealth maximisation as the financial objective of the firm;
• discuss the key issues in the theory of financial management;
• apply Net Present Value model to valuing securities;
• critically analyse the models which tie down the relationship between the returns on a security and its risk;
• demonstrate comprehensive knowledge and understanding of the efficient capital markets hypothesis and its implications to financial managers;
• critically appraise the theories on the relevance of dividends and capital structure.