THE UNIVERSITY OF EDINBURGH

BUST08003: Principles of Finance

Final Examination Guide and Notes 2026

Part A: About This Guide

Part B: Sample Final Examination Paper

Part C: Suggested Solutions to Final Exam Paper

Part D: Final Examination - Hints and Tips

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University of Edinburgh - BUST08003: Principles of Finance - Solutions

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ACADEMIC YEAR 2026 - 2027

University	University of Edinburgh
Course Code	BUST08003
Course Name	Principles of Finance
SCQF Credits	20
Notes Title	Final Examination Guide and Notes
Format	PDF
Page Length	36

Prepare with confidence for BUST08003: Principles of Finance at the University of Edinburgh with this clear, exam-focused set of notes. It explains how the final exam is marked and organised, and shows you the main question styles to expect. Inside you’ll find exam-style questions with step-by-step solutions, straightforward explanations, and final-exam hints and tips, plus practical guidance on format, key marking points, timing, and model solutions to check your work.

The course looks at the way assets are valued in financial markets. It considers interest rates and the pricing of fixed-income bonds; stock market prices and returns; stock market risk and the influence of risk on the pricing of shares; and the characteristics and pricing of financial futures and options. The course also covers some aspects of company finance theory. These include business investment decisions, sources of finance, the cost of capital, the financial structure decision and the dividend decision.

✔ Outline Content:

Prices and Returns in Financial Markets - - Financial decision making; - Price of a stream of cash flows; - Bond prices; - Stock prices; - Option prices; - Risk and return.

Company Financial Decisions - - Introduction to corporate finance; - The capital budgeting decision; - Sources of finance; - Cost of capital; - Capital structure; - Dividend policy.

Pre-requisites: Students MUST have passed (Global Challenges for Business (BUST08035) AND The Business of Edinburgh (BUST08036)) OR Economics 1 (ECNM08013) OR ( Economic Applications (ECNM08003) AND Economic Principles (ECNM08004)).

COURSE CODE	COURSE NAME
ACCN08007	Accountancy 1A
ACCN08008	Accountancy 1B
ACCN08009	Accountancy 2A
ACCN08012	Accounting for Business 1
BUST08003	Principles of Finance
BUST08004	Marketing
BUST08005	Business Economics
BUST08018	Applications of Finance
BUST08029	Introduction to Financial Markets
BUST08030	Introduction to Corporate Finance
BUST08033	Introduction to Data Analysis
BUST10012	Corporate Finance
BUST10023	Futures and Options
BUST10032	Investment and Securities Markets
ECNM08004	Economic Principles
ECNM08016	Statistical Methods for Economics
ECNM10052	Essentials of Econometrics
ECNM10056	Applications of Econometrics
ECNM10069	Topics in Macroeconomics
ECNM10070	Topics in Microeconomics
MATH08051	Statistics
PPLS08001	Research Methods and Statistics

UKNOTES

University of Edinburgh - BUST08003: Principles of Finance - Solutions

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