CORPFIN 7005 - Principles of Finance (M)
North Terrace Campus - Semester 2 - 2017
General Course Information
Course Code CORPFIN 7005 Course Principles of Finance (M) Coordinating Unit Business School Term Semester 2 Level Postgraduate Coursework Location/s North Terrace Campus Units 3 Contact Up to 3 hours per week Available for Study Abroad and Exchange Y Corequisites ACCTING 7019 Assumed Knowledge COMMERCE 7033 Course Description 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 and the levels of dividends and other payouts for their shareholders.
Course Coordinator: Associate Professor Chee CheongName: Dr Chee Cheong (Lecturer-in-Charge)
Location: Room 12.41, Nexus 10, Adelaide SA 5005
Telephone: 8313 0356 (work)
The full timetable of all activities for this course can be accessed from Course Planner.
Course Learning OutcomesOn 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
Ross, Drew, Walk, Westerfield and Jordan, Fundamentals of Corporate Finance, 7th Edition, McGraw-Hill, 2016, ISBN 9781743761830.
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.
Recommended ResourcesReference Books
Berk, DeMarzo, Harford, Ford, Mollica & Finch, Fundamentals of Corporate Finance, 2nd edition, Pearson, 2013.
Brigham and Houston, Fundamentals of Financial Management, 13th Edition, Thomson, 2013.
Pierson, Brown, Easton, Howard and Pinder, Business Finance, 11th Edition, McGraw Hill, 2011.
Learning & Teaching Activities
Learning & Teaching ModesLectures & Tutorials
This course will offer 2-hour lecture per week from week 1 to week 12. In addition to the lectures, 1 hour tutorial class will be offered from week 2 until week 12.
Tutorial classes will be held weekly from week 2 to 12. Membership of tutorial classes is to be finalised by the end of the second week of semester. Students wishing to swap between tutorial classes after this time are required to present their case to the Lecturer-in-Charge, but should be aware that such a request may not be approved.
Tutorials are an important component of your learning in this course. The communication skills developed in tutorials by regularly and actively participating in discussions are considered to be most important by the School and are highly regarded by employers and professional bodies.
The information below is provided as a guide to assist students in engaging appropriately with the course requirements.Students in this course are expected to attend all lectures and tutorials throughout the semester.
The University expects full-time students (i.e. those taking 12 units per semester) 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 SummaryTopic 1: Introduction Issues in Corporate Finance – the scope and activities of corporate finance, principles roles of corporate finance manager & the key objective of financial management.
Topic 2: Valuing Bonds and Shares – introduction to bonds, valuation of bonds, introduction to shares & valuation of shares.
Topic 3: Capital Budgeting – introduction to various capital budgeting criteria, application of criteria to investment proposals, advantages and disadvantages of each criteria.
Topic 4: Cash Flow Estimation and Analysis of Risk – determination of relevant cash flows for investment analysis, sources of risk in cash flow forecasting, assessment of forecasting risk, implications of management options in project evaluation.
Topic 5: Risk and Return, and Capital Market Efficiency – introduction to the concept of expected returns & volatilities for individual assets and for portfolios of assets, a brief discussion about efficient market hypotheses.
Topic 6: Portfolio Management and Asset Pricing – introduction to the concept of diversification strategy, Capital Asset Pricing Model, Arbitrage Pricing Model & empirical models.
Topic 7: Cost of Capital – determination of cost of equity, cost of preference share, cost of debt and weighted average cost of capital (WACC).
Topic 8: Capital Structure and Leverage – introduction to common types of long term capital, Modigliani and Miller capital structure decision, effects of corporate taxes and effects of financial distress.
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 Task Weighting Learning Outcome Test 1 10% 1,2 Test 2 10% 1,2,3,4 Tutorial Participation 10% 1,2,3,4,5,6 Final Exam (closed book) 70% 1,2,3,4,5,6 Total 100%
Assessment DetailTest 1 will cover topics 1 and 2.
Test 2 will cover topics 1 to 5.
Final Exam will cover all topics in the course.
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.
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.
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