CORPFIN 7005 - Principles of Finance (M)

North Terrace Campus - Trimester 1 - 2021

This course introduces you to the world of modern finance, especially to the financial operations of a business. It covers the concepts of time value of money, basic asset valuation, risk and return paradigm, capital budgeting and financing decisions. Upon completion, students will be able to value bonds and stocks, estimate asset returns according to their risk characteristics and identify capital projects that maximize shareholder's wealth using a wide range of analytical tools. They will also develop a good understanding on how firms finance their capital expenditure.

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Course Details

Course Code	CORPFIN 7005
Course	Principles of Finance (M)
Coordinating Unit	Finance and Banking
Term	Trimester 1
Level	Postgraduate Coursework
Location/s	North Terrace Campus
Units	3
Contact	Up to 3 hours per week
Available for Study Abroad and Exchange	Y
Assessment	Exam/assignments/tests/tutorial work as prescribed at first lecture

Course Staff

Course Coordinator: Peter Lennox

Adelaide Trimester 1, 2021
Name: Mr. Peter Lennox Email: peter.lennox@adelaide.edu.au
Adelaide Semester 1, 2021	Melbourne Trimester 1, 2021
Dr Chee Seng Cheong Associate Professor in Finance Adelaide Business School Level 12, 10 Pulteney Street South Australia, 5005, AUSTRALIA T: +61 8 8313 0356 E: chee.cheong@adelaide.edu.au W:www.business.adelaide.edu.au	Name: G M Wali Email: gm.waliullah@adelaide.edu.au

Adelaide Semester 2, 2021

Dr Tariq Haque
Lecturer in Finance
Adelaide Business School
Room 22, Level 12, 10 Pulteney Street
South Australia, 5005, AUSTRALIA
T: +61 8 8313 7599
E: tariq.haque@adelaide.edu.au
W:www.business.adelaide.edu.au

Adelaide Trimester 3, 2021

Dr Ratna Derina
Lecturer in Finance
Adelaide Business School
Room 37, Level 12, 10 Pulteney Street
South Australia, 5005, AUSTRALIA
T: +61 8 8313 7137
E: ratna.derina@adelaide.edu.au
W:www.business.adelaide.edu.au

Course Timetable

The full timetable of all activities for this course can be accessed from Course Planner.

Course Learning Outcomes

On successful completion of this course, students will be able to:

Explain the financial goal of a firm.
Apply time value of money principles to evaluate investment opportunities.
Apply various capital budgeting techniques to evaluate investment projects.
Determine the required return of different sources of finance.
Compute the weighted average cost of capital of a project or a firm.
Demonstrate the impact of taxes and bankruptcy costs on a firm’s capital structure.

University Graduate Attributes

This course will provide students with an opportunity to develop the Graduate Attribute(s) specified below:

University Graduate Attribute	Course Learning Outcome(s)
Deep discipline knowledge informed and infused by cutting edge research, scaffolded throughout their program of studies acquired from personal interaction with research active educators, from year 1 accredited or validated against national or international standards (for relevant programs)	1,2,3,4,5,6
Critical thinking and problem solving steeped in research methods and rigor based on empirical evidence and the scientific approach to knowledge development demonstrated through appropriate and relevant assessment	2,3,4,5,6
Teamwork and communication skills developed from, with, and via the SGDE honed through assessment and practice throughout the program of studies encouraged and valued in all aspects of learning	1,2,3,4,5,6
Career and leadership readiness technology savvy professional and, where relevant, fully accredited forward thinking and well informed tested and validated by work based experiences	2, 3

Learning Resources

Required Resources

TRIMESTER 1 AND SEMESTER 1:

Textbook
Parrino, Au Yong, Dempsey, Morkel-Kingsbury, Ekanayake, James, Murray, Fundamentals of Corporate Finance, 3rd Edition, Wiley, 2019, ISBN 978-0-7303-6346-0.

Calculator
This course requires considerable mathematical computation. Although much of it is relatively simple, access to an appropriate calculator is necessary. If you intend to purchase a calculator for this course, you will find it useful to purchase a financial calculator. This is of particular relevance for the time value of money calculations - the relevant function keys include; PV, FV, PMT, n, I/Y, NPV, IRR. Any financial calculator is suitable for this course. The most popular financial calculator is the Sharp EL738 (or its variations).

SEMESTER 2 and TRIMESTER 3 2021

Textbook
Parrino, Au Yong, Dempsey, Morkel-Kingsbury, James, Mazzola, Murray, Smales, and Wei, Fundamentals of Corporate Finance, 4th Edition, Wiley, 2020

Calculator
This course requires considerable mathematical computation. Although much of it is relatively simple, access to an appropriate calculator is necessary. If you intend to purchase a calculator for this course, you will find it useful to purchase a financial calculator.
This is of particular relevance for the time value of money calculations - the relevant function keys include; PV, FV, PMT, n, I/Y, NPV, IRR. Any financial calculator is suitable for this course. The most popular financial calculator is the Sharp EL738 (or its variations).

Recommended Resources

SEMESTER 2 2021:

Other Reference Books
Berk, DeMarzo, Harford, Ford, Mollica, and Finch, Fundamentals of Corporate Finance, 2nd edition, Pearson, 2013.
Graham, Adam, and Gunasingham, Corporate Finance, 3rd Asia-Pacific Edition, Cengage, 2021.
Parrino, Au Yong, Dempsey, Morkel-Kingsbury, Ekanayake, James, Murray, Fundamentals of Corporate Finance, 3rd Edition, Wiley, 2019, ISBN 978-0-7303-6346-0.
Ross, Drew, Walk, Westerfield and Jordan, Fundamentals of Corporate Finance, 7th Edition, McGraw-Hill, 2016, ISBN 9781743761830.

Online Learning

This course offering will be delivered both face-to-face and online.
Relevant course links for Zoom will be made available via MyUni.
Learning & Teaching Activities

Learning & Teaching Modes

This course will offer 3-hours of content each week including a 120-minute face-to-face / online interactive seminar. This will continue from trimester week 1 to week 12. The seminar will be focused on revising the prior week recorded lecture class via Echo360 covering a particular topic, and applying those principles via topic-based Student Review Questions. Regarding the lecture recording, the focus in the seminar will be on the practical application of the lecture / readings content. However, note that all of the course materials (lectures / readings) are assessable. In addition, class based activities, including assessable student tasks will be held during the scheduled 3-hour specified seminar times.
Class attendance for the interactive seminar is an important component of student learning in this course and is likely to improve your assessment performance in this intake of the course. The communication skills developed in class by regular and active participation in discussions are considered to be most important by the Adelaide Business School, and are highly regarded by employers and professional bodies.

Workload

The information below is provided as a guide to assist students in engaging appropriately with the course requirements.

The information below is provided as a guide to assist students in engaging appropriately with the course requirements.
Although not compulsory, students in this intake of the course are expected to attend all seminars throughout the trimester.
The University expects full-time students (i.e. those taking 12 units per relevant term) to devote a total of 48 hours per week to their studies. This means that you are expected to commit approximately 9 hours of private study outside of your regular classes.

Learning Activities Summary

The schedule of lecture topics for this intake of the course is as follows:

Topic #1: Introduction to financial management (Text chapter 1) – the scope and activities of corporate finance, principles roles of corporate finance manager and the key objective(s) of financial management.

Topic #2: Introduction to valuation: the time value of money (Text chapter 4) – the future value of an investment made today and the equivalent present value of cash to be received at a future date, the process of calculating a return on investment and predicting how long it takes for an investment to reach a desired value.

Topic #3: Discounted cash flow valuation (Text chapter 5) – determining the future and present value of investments with multiple cash flows, calculating loan payments and find the interest rate on a loan, describing how loans are amortised or paid off and explaining how interest rates are quoted (and misquoted).

Topic #4: Some lessons from capital market history and Risk and return (Text chapters 10 and 11) – introduction to the concept of expected returns and volatilities for individual assets, as well as for portfolios of assets, a brief discussion about efficient market hypotheses, calculating expected returns, an explanation of the impact of diversification, understanding of the systematic risk principle, and discussion of the security market line and the risk–return trade-off.

Topic 5: Valuing Bonds and Shares (Text chapters 6 and 7) – introduction to bonds, valuation of bonds, discussion of bond ratings and what they mean, evaluate the term structure of interest rates, impact of inflation on interest rates and the determinants of bond yields, introduction to shares and valuation aspects of shares and a discussion of how share markets work.

Topic #6: Net present value and other investment criteria (Text chapter 8) – introduction to various capital budgeting criteria, application of criteria to investment proposals, and advantages and disadvantages of each criteria.

Topic #7: Making capital investment decisions (Text chapter 9) – determination of relevant cash flows for investment analysis, sources of risk in cash flow forecasting, and evaluation of an estimated NPV.

Topic #8: Cost of Capital (Text chapter 12) – determination of cost of equity, cost of preference shares, cost of debt and overall weighted average cost of capital (WACC).

The University's policy on Assessment for Coursework Programs is based on the following four principles:

Assessment must encourage and reinforce learning.
Assessment must enable robust and fair judgements about student performance.
Assessment practices must be fair and equitable to students and give them the opportunity to demonstrate what they have learned.
Assessment must maintain academic standards.

Assessment Summary

ssessment Task	Task Type	Due	Weighting	Learning Outcome
Class Test (open book)	Individual	TBC	15%	1, 2, 3, 4
Class Presentation and Peer Review	Group	TBC	25%	1, 2, 3, 4, 5
Final Exam (closed book)	Individual	Exam Period	60%	1, 2, 3, 4, 5, 6
TOTAL			100%

Due to the current COVID-19 situation modified arrangements have been made to assessments to facilitate remote learning and teaching. Assessment details provided here reflect recent updates.

The assessment for this course (detail/percentage) will now be:
Class Test (completed) 15%
Group Presentation and Peer Review (online) 25%
Online final exam 60%

Assessment Detail

Open-book class test to be completed in the trimester week 6 class and will be held over a period of 90 minutes on an individual basis. The test will cover topics 1 to 3 of the course materials. Questions will comprise a combination of true-false, multiple choice, fill-in-the-blanks and short answer (discussion / problem-based) questions. This assessment component is allocated 15% of the total assessment marks for the course.

Class presentation and peer review to be completed on a self-allocated group basis comprising 3 tasks;
i) Group presentation to be delivered in the trimester week 9 class for a duration of no longer than 10 minutes and requires student groups to respond to a given discussion question relevant to the course topic materials. This task is allocated 10% of the total assessment marks for the course. All presentation materials to be submitted for marking immediately following the week 9 class.
ii) Group peer review requires student groups to provide an oral and written critique of another trimester week 9 group presentation. This task is allocated 7.5% of the total assessment marks for the course. The written critique is to be submitted for marking immediately following the week 10 class.
iii) Group problem-based submission requires student groups to provide a written response to a problem-based question. . This task is allocated 7.5% of the total assessment marks for the course.

Closed-book final exam to be completed as scheduled during the university examination period and will be held over a period of 180 minutes plus reading time on an individual basis. The test will cover all 8 topics of the course materials. Questions will comprise a combination of true-false, multiple choice, fill-in-the-blanks and short answer (discussion / problem-based) questions. This assessment component is allocated 60% of the total assessment marks for the course.

Submission

No information currently available.

Course Grading

Grades for your performance in this course will be awarded in accordance with the following scheme:

M10 (Coursework Mark Scheme)
Grade	Mark	Description
FNS		Fail No Submission
F	1-49	Fail
P	50-64	Pass
C	65-74	Credit
D	75-84	Distinction
HD	85-100	High Distinction
CN		Continuing
NFE		No Formal Examination
RP		Result Pending

Further details of the grades/results can be obtained from Examinations.

Grade Descriptors are available which provide a general guide to the standard of work that is expected at each grade level. More information at Assessment for Coursework Programs.

Final results for this course will be made available through Access Adelaide.

Student Feedback

The University places a high priority on approaches to learning and teaching that enhance the student experience. Feedback is sought from students in a variety of ways including on-going engagement with staff, the use of online discussion boards and the use of Student Experience of Learning and Teaching (SELT) surveys as well as GOS surveys and Program reviews.

SELTs are an important source of information to inform individual teaching practice, decisions about teaching duties, and course and program curriculum design. They enable the University to assess how effectively its learning environments and teaching practices facilitate student engagement and learning outcomes. Under the current SELT Policy (http://www.adelaide.edu.au/policies/101/) course SELTs are mandated and must be conducted at the conclusion of each term/semester/trimester for every course offering. Feedback on issues raised through course SELT surveys is made available to enrolled students through various resources (e.g. MyUni). In addition aggregated course SELT data is available.
Student Support
Policies & Guidelines
This section contains links to relevant assessment-related policies and guidelines - all university policies.
Fraud Awareness

Students are reminded that in order to maintain the academic integrity of all programs and courses, the university has a zero-tolerance approach to students offering money or significant value goods or services to any staff member who is involved in their teaching or assessment. Students offering lecturers or tutors or professional staff anything more than a small token of appreciation is totally unacceptable, in any circumstances. Staff members are obliged to report all such incidents to their supervisor/manager, who will refer them for action under the university's student’s disciplinary procedures.

The University of Adelaide is committed to regular reviews of the courses and programs it offers to students. The University of Adelaide therefore reserves the right to discontinue or vary programs and courses without notice. Please read the important information contained in the disclaimer.

Authorised by:	Deputy Vice-Chancellor and Vice-President (Academic)
Maintained by:	Course Outlines Administrator