The
Syllabus outlines the content of the paper and
how that content is examined.
Financial
strategy involves, amongst other things, allocating,
managing and funding resources. As financial
decisions frequently involve considerable amounts
of money, it is important to consider, and understand
the consequences of, various options that may
be available. As the environment in which financial
decisions are made is constantly changing, those
involved in making such decisions must be aware
of what might happen if different circumstances
prevailed.
AIM
This paper provides insight to the world of
financial strategy - when, how and where finance
should be raised, which method(s) of financing
should be used, which projects are worth undertaking,
how to minimise working capital investment and
how to value businesses.
CONTENT
Raising Finance
-
debt finance and equity finance (short,
medium and long term)
-
global financial markets
-
market for corporate control
-
risk associated with different types of
finance
-
evaluating financing decisions
-
the cost of capital
-
classes of shares - including use of warrants
and convertibles
-
redemption and repurchase of shares
-
the effect of different methods of finance
on stock market ratios
- PFI/PPP
Investment
Appraisal Techniques
-
Net Present Value, Internal Rate of Return,
Accounting Rate of Return, Payback, Discounted
Payback, Profitability Index
-
advantages and disadvantages of each technique
-
impact of inflation and taxation
-
sensitivity analysis
-
qualitative factors
Working
Capital Management
-
monitoring and controlling investment in
working capital
-
financial implications of working capital
policies
-
risk associated with incorrect levels of
investment in working capital
Mergers
and Acquisitions
-
reasons for acquisitions and mergers
-
basic valuation techniques
-
alternative forms of consideration
For
Paper 3 detailed syllabus
click
here and study guide click
here.
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