SBUS42020

This module explores the importance of establishing a firm’s optimal capital structure in maximising shareholder returns and examines the different equity and debt capital financing options which are appropriate during a firm’s business life cycle.

The module develops in students an understanding of how to identify, evaluate and select the optimal capital structure using the appropriate sources and types of financing options including the fixed income market options.

The module also provides students with an understanding of the bank lenders credit risk assessment criteria which banks use when credit risk assessing a capital raising proposal and an overview of the financing landscape in Ireland.

The topics to be covered include:

• The different types and characteristics of equity finance and short- term, medium-term and long-term debt finance
• The different sources of raising long term finance including capital markets, bank finance, venture capital, initial public offering, private placements, angel investor market
• The equity gap in early-stage firms
• Market quotes interpretation regarding stocks
• Bonds and derivatives
• Optimal financing decisions including theories of capital structure, cost of capital, weighted average cost of capital and the time value of money
• Banks credit risk appetite statements and the implications for raising debt finance, credit facility pricing for risk, credit risk assessing capital raising business plans from the bank lender perspective and the different types of security offered