# IB132 - Foundations of Finance

• Module code: IB132
• Module name: Foundations of Finance
• Department: Warwick Business School
• Credit: 12, 15

## Module content and teaching

###### Principal aims

The module aims: to introduce you to the key concepts of Finance in a way that builds sound intuition from the outset, without sacrificing rigour; to prepare the foundations for more advanced study of Finance by encouraging you to develop a critical understanding of the main theories and models of Finance (and the assumptions that underpin them); to provide you with structured opportunities to practise using the key tools and techniques of Finance; to encourage you to read the financial press and to make links with what you are learning in the classroom.

###### Principal learning outcomes

By the end of the module you should be able to: critically appraise the value added by a capital project by calculating the present value of expected future cash flows, and estimating the cost of capital; define the different forms of market efficiency, and discuss the findings of empirical tests of the Efficient Markets Hypothesis; compare and contrast the main sources of financing for a company; explain what is meant by capital structure and dividend policy, and discuss the relevance of each to corporate financial management; distinguish between spot and forward exchange rates; state and apply the Interest-Rate Parity and Purchasing Power Parity theorems in the context of foreign exchange; define key shareholder ratios (e.g. earnings per share, dividend yield and price-earnings ratio) and use discounted cash-flow techniques to estimate share prices; price simple financial option contracts; write informed critiques of key issues in Finance; use discounted cash-flow techniques to value financial securities and/or estimate the value added by capital projects; construct spreadsheets to calculate Net Present Values and Internal Rates of Return, and to price simple financial option contracts; explain key theoretical models and the assumptions that underpin them, and reflect critically on the limitations of those models; interpret empirical evidence; solve numerical problems and analyse case-study information; communicate complex ideas effectively, both verbally and in writing; discuss topical issues about the theory and practice of Finance; explain and interpret financial market information; solve structured numerical problems; construct spreadsheets to value financial instruments and test the robustness of those values to changes in key inputs.

###### Timetabled teaching activities

2 hours per week lecture, 1 hour per week seminar

## Module assessment

Assessment group Assessment name Percentage
12 CATS (Module code: IB132-12)
D (Assessed/examined work) Assessed Course Work 20%
Examination - Main Summer Exam Period (weeks 4-9) 80%
Assessed Course Work 20%
Examination - Main Summer Exam Period (weeks 4-9) 80%
15 CATS (Module code: IB132-15)
D1 (Assessed/examined work) Assessed Course Work 20%
Examination - Main Summer Exam Period (weeks 4-9) 80%
Examination - Main Summer Exam Period (weeks 4-9) 100%

## Module availability

This module is available on the following courses:

###### Core
• Undergraduate Chemistry with Management (F1N1) - Year 2
• Undergraduate Chemistry with Management (with Intercalated Year) (F1N2) - Year 2
• Undergraduate Computer and Business Studies (GN51) - Year 1
• Undergraduate Economics 3 Year Variants (L116) - Year 1
###### Optional Core
• Undergraduate Mathematics and Business Studies (with Intercalated Year) (G1N2) - Year 2
• Undergraduate Mathematics and Business Studies (G1NC) - Year 2
• Undergraduate Global Sustainable Development and Business (L8N1) - Year 1
• Undergraduate Law and Business Studies with Intercalated Year (3+1) (MN35) - Year 1
• Undergraduate Law and Business Studies with Intercalated Year (4+1) (MN36) - Year 1
• Undergraduate Law and Business Studies (Qualifying Degree) with Intercalated Year (MN37) - Year 1
• Undergraduate German and Business Studies (RN21) - Year 1
###### Optional
• Undergraduate Physics and Business Studies (F3N1) - Year 2
• Undergraduate Physics and Business Studies (F3N1) - Year 3
• Undergraduate Physics and Business Studies (with Intercalated Year) (F3ND) - Year 4
• Undergraduate Chemistry and Business Studies (FN11) - Year 3
• Chemistry and Business Studies(with Intercalated Year) (FN12) - Year 4
• Undergraduate Mathematics (BSc) (G100) - Year 2
• Undergraduate Mathematics with Intercalated Year (G101) - Year 2
• Undergraduate Mathematics (MMath) (G103) - Year 2
• Undergraduate Master of Mathematics (with Intercalated Year) (G105) - Year 2
• Undergraduate Mathematics (MMath) with Study in Europe (G106) - Year 2
• Undergraduate Mathematics and Statistics (BSc MMathStat) (G1G3) - Year 2
• Undergraduate Mathematics and Business Studies (with Intercalated Year) (G1N2) - Year 2
• Undergraduate Mathematics and Business Studies (G1NC) - Year 2
• Undergraduate Mathematics and Business Studies (G1NC) - Year 3
• Undergraduate Master of Mathematics,Operational Research,Statistics and Economics (G300) - Year 2
• Undergraduate Mathematics and Statistics (BSc) (GG14) - Year 2
• Undergraduate Mathematics and Economics (GL11) - Year 2
• Undergraduate Mathematics and Economics (with Intercalated Year) (GL12) - Year 2
• BSc Engineering and Business Studies (HN11) - Year 3
• Undergraduate Economics 3 Year Variants (L100) - Year 1
• Undergraduate Economics 3 Year Variants (L116) - Year 1
• Undergraduate Economics, Politics and International Studies (LM1D) - Year 1
• Undergraduate Law and Business Studies (MN31) - Year 2
• Undergraduate Law and Business Studies (MN32) - Year 2
• Law and Business Four Year (Qualifying Degree) (MN34) - Year 2
• Undergraduate Law and Business Studies with Intercalated Year (3+1) (MN35) - Year 2
• Undergraduate Law and Business Studies with Intercalated Year (4+1) (MN36) - Year 2
• Undergraduate Law and Business Studies (Qualifying Degree) with Intercalated Year (MN37) - Year 2
• Undergraduate Philosophy, Politics and Economics (V7ML) - Year 1
• Undergraduate Language, Culture and Communication (X3Q5) - Year 2
• Undergraduate Mathematics,Operational Research,Statistics and Economics (Y602) - Year 2