DEPARTMENT OF ACCOUNTING AND FINANCE

Ac.F263L: Introduction to Finance

Lent Term 2025

1 Module Objectives

This course provides an introduction to finance for non-specialists. The course aims to develop a basic understanding of the financial environment, the importance of capital markets and how corporations’ financial  managers  make  financial  decisions. The  course will  introduce  key financial concepts, such as the time value of money, and teach the students to use them to value financial assets. We will also examine the relationship between risk and return by introducing the ideas of diversification. Finally, the course aims to introduce the capital budgeting process by focusing on the application of the Net Present Value (NPV) rule and other investment criteria.

ACF263L is a 15-credit course which has no pre-requisite modules. ACF263L is an optional course available only to non-accounting and non-finance major students. It is not available to students who have already taken ACF100.

2 Learning Outcomes

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

•    be able to explain the goals of financial management and understand conflicts which may arise between owners and managers,

•    be able to compute the present value, future value and rate of return of investments and compare criteria used to make investment decisions,

•    understand differences between the various types of bonds, the determinants of bond yields, and be able to explain what impact inflation and interest rates may have on bond prices,

•    have an overview of the operation of capital markets, how firms raise capital, the role of risk in determining investment returns, and be able to calculate a firm’s cost of capital,

•    be able to calculate stock prices using the dividend growth model and understand the importance of diversification and the role of systematic risk.

3 Reading and e-learning resources

The core textbook for this module is: “Essentials of Corporate Finance” by Stephen Ross, Randolph Westerfield and Bradford Jordan (2022, 11th edition, ISBN: 9781265103514, McGraw- Hill. Education). Students are strongly advised to purchase a copy of the main text for the course. Most of the workshop questions and self-study problems will betaken from this text. This book’s current and older editions, including an ebook, are available in the library. Older editions are also suitable for this course. The course content will be delivered on the assumption that students have read the recommended chapters listed in the lecture outline (see Section 6 of this outline).

Please also check the textbook’s blog. There is a collection of recent news articles related to the topics covered in this module with references to the chapters from the main textbook.

Other (substitute/alternative) textbooks (none of which are recommended for purchase but which are available in the library) are as follows:

•  Berk, J. &  P.  DeMarzo (2024). Corporate  Finance, 6th   (Global)  edition (or older),  Pearson Education, ISBN 9781292446318.

• Brealey, R., Myers, S., & F. Allen (2020). Principles of Corporate Finance, 13th edition (or older), McGraw-Hill Education, ISBN 9781260013900.

Teaching notes and workshop solutions will be made available on the Moodle website. Follow the link and locate the page for the ACF263L module during the first week of the course to confirm you are registered for it to receive the course notices and gain access to the web-based discussion group. Each week, there is a separate section which details the learning activities for that week. You must access this site for all content, so check it regularly.

4 Module Administration

Your course leader is Dr Alexey Akimov. His contact details and office hours are given below. Office hours will take place once a week. Please drop into the office hours on Thursday at Charles Carter C34 from 12:00-13:00. Office hours may be used to get help from the lecturer with a particular topic or question covered by this course.

•    Office: Charles Carter C34

•    Message me on Teams

•    E-mail: [email protected]

•    Office hours: every Thursday 12:00-14:00

The course will be taught by a combination of lectures (19 hours) and workshops (18 hours) supplemented by students’ reading and practice of questions. You must attend the lecture session for which you are enrolled. Please check your timetable if you are unsure.

Students are required to attend a weekly workshop, the first of which takes place in week 12. Workshops will allow us to practice techniques and discuss problems not covered during lectures. You are required to prepare answers to set questions before the workshop. Details of your workshop questions will be provided on Moodle each week. Workshop attendance will be monitored.  It  is your  responsibility to  ensure you  register your  attendance  in  compulsory sessions on this module by checking into the i-Lancaster system during the sessions. Attendance at lectures and workshops will be assumed when setting examinations.

In weeks 13 and 16, there will be a 1-hour drop-in session for the students to ask questions about the course materials. The drop-in session attendance is not compulsory. This is in addition to the office hours above (which are also optional to attend).

The lecture and other activities are: 

Activity                      Day of Week    Time                Location                 Week number

Your total study time for this module is expected to be at least 150 hours.

5 Module Assessment

The module is assessed as follows:

•    Mid-term test (Week 17): 25%

•    Exam (May/June): 75%

A 60-minute test on Week 17 will consist of open-ended and multiple-choice questions covering the topics of the first five weeks of the course. The test will be based on the materials covered in the main textbook, lectures, Moodle quizzes, and workshops. It will be a good way to test your understanding of the key concepts/issues taught and to assess your strengths and weaknesses regarding the materials covered up to that point.

The coursework task in this module falls into the AI Red category. The University position on

Artificial Intelligence is available athttps://portal.lancaster.ac.uk/ask/university-position-ai/

Note: The department reserves the right to adjust coursework marks after coursework has been returned to students to ensure that the coursework marks have an appropriate distribution.