FM212     
Principles of Finance

This information is for the 2014/15 session.

Teacher responsible

Prof Christopher Polk OLD 4.23 and Prof Richard Payne STC S684

For enquiries related to this course (including requests to take the course) please contact the Lead Teacher, Dr Paula Lopes (p.v.lopes-cocco@lse.ac.uk, room STC S687).

Availability

This course is compulsory on the BSc in Accounting and Finance, BSc in Statistics with Finance and Diploma in Accounting and Finance. This course is available on the BSc in Actuarial Science, BSc in Business Mathematics and Statistics, BSc in Econometrics and Mathematical Economics, BSc in Economics, BSc in Management, BSc in Management Sciences, BSc in Mathematics and Economics, BSc in Philosophy and Economics and BSc in Social Policy and Economics. This course is available as an outside option to students on other programmes where regulations permit. This course is available with permission to General Course students.

Pre-requisites

Students must have completed: one level 1 Economics course (either EC100 Economics A or EC102 Economics B), one level 1 Mathematics course and one level 1 Statistics course.

Course content

The course examines the theory of financial decision-making by firms and examines the behaviour of the capital markets in which these decisions are taken. The topics covered are the theory of capital budgeting under certainty in perfect and imperfect capital markets, portfolio theory, equity and bond markets, the capital asset pricing model, efficient markets, sources of funds, basic theory of capital structure and the cost of capital, company dividend decisions and financial markets and institutions.

Teaching

20 hours of lectures and 9 hours of classes in the MT. 20 hours of lectures and 10 hours of classes in the LT. 4 hours of lectures and 3 hours of classes in the ST.

Formative coursework

Students are expected to produce written work for classes and to make positive contributions to class discussion.

Indicative reading

Detailed course programmes and reading lists are distributed at the start of the course. Illustrative texts include: Principles of Corporate Finance by Richard Brealey, Stewart Myers, and Franklin Allen, McGraw-Hill Inc.

Assessment

Exam (100%, duration: 3 hours) in the main exam period.

Key facts

Department: Finance

Total students 2013/14: 556

Average class size 2013/14: 12

Capped 2013/14: No

Lecture capture used 2013/14: No

Value: One Unit

Guidelines for interpreting course guide information

PDAM skills

  • Problem solving
  • Application of numeracy skills
  • Commercial awareness

Course survey results

(2011/12 - 2013/14 combined)

1 = "best" score, 5 = "worst" score

The scores below are average responses.

Response rate: 76.3%

Question

Average
response

Reading list (Q2.1)

2.2

Materials (Q2.3)

2.3

Course satisfied (Q2.4)

1.9

Lectures (Q2.5)

2.1

Integration (Q2.6)

2

Contact (Q2.7)

2.2

Feedback (Q2.8)

2.2

Recommend (Q2.9)

Yes

74.1%

Maybe

23.6%

No

2.3%