CORPFIN 7005 - Principles of Finance (M)

North Terrace Campus - Semester 2 - 2020

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.

  • General Course Information
    Course Details
    Course Code CORPFIN 7005
    Course Principles of Finance (M)
    Coordinating Unit Adelaide 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 CORPFIN 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.
    Course Staff

    Course Coordinator: Peter Lennox

    Name: Mr. Peter Lennox
    Email: peter.lennox@adelaide.edu.au
    Course Timetable

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

  • Learning Outcomes
    Course Learning Outcomes
    On successful completion of this course, students will be able to:
    1. Explain the financial goal of a firm.
    2. Apply time value of money principles to evaluate investment opportunities.
    3. Apply various capital budgeting techniques to evaluate investment projects.
    4. Determine the required return of different sources of finance.
    5. Compute the weighted average cost of capital of a project or a firm.
    6. 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
    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).
    Recommended Resources
    Other Reference 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.
    Peirson, Brown, Easton, Howard and Pinder, Business Finance, 11th Edition, McGraw Hill, 2011.
    Ross, Drew, Walk, Westerfield and Jordan, Fundamentals of Corporate Finance, 7th Edition, McGraw-Hill, 2016.
    Online Learning
    This course offering will be delivered via a mix of online and face-to-face teaching.
    Each week, unless otherwise specified, a 2-hour recorded lecture (via Echo 360) commencing from semester week 1 and a 50 minute interactive tutorial class will be provided to students.
    Note that some of the tutorial classes will be provided on a face-to-face basis with the rest offered online (via Zoom). 
    Relevant course links for for the online (Zoom) tutorial classes will be provided prior to the commencement of each weeks class via MyUni.
    Please refer to the course planner for further details of which tutorial classes are offered face-to-face and which are offered on an online basis.
  • Learning & Teaching Activities
    Learning & Teaching Modes
    Lectures & Tutorials
    This course will offer 2-hour lecture per week from week 1 to week 12. In addition to the lectures, a 50-minute tutorial class will be offered from week 2 until week 12.

    Tutorials
    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 Course Coordinator, but given the current restrictive circumstances, and the differences between face-to-face and online classes, changes are generally unlikely to 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 both employers and professional bodies.
    Workload

    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 Summary
    Topic #1 : The financial manager and the company (Text Chapter 1)

    Topic #2 : The time value of money (Text Chapter 3)

    Topic #3 : Discounted cash flows and valuation (Text Chapter 4)

    Topic # 4 : Risk and return (Text Chapter 5)

    Topic # 5 : Bond valuation and the structure of interest rates (Text Chapter 6)

    Topic # 6 : Share valuation (Text Chapter 7)

    Topic # 7 : The fundamentals of capital budgeting (Text Chapter 8)

    Topic # 8 : Cash flows and capital budgeting (Text Chapter 9)

    Topic # 9 : The cost of capital (Text Chapter 11)

    Topic # 10 : Capital structure policy (Text Chapter 14)

    Please refer to the Teaching Schedule located on MyUni regarding the relevant semester weeks each topic ois covered in lectures and tutorials.
  • Assessment

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

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

    Assessment Summary
    Assessment Task Weighting Learning Outcome
    Class Test #1 10% 1, 2
    Class Test #2 15% 1, 2, 4
    Discussion Forum participation 20% 1, 2, 3, 4, 5, 6
    Final Exam 55% 1, 2, 3, 4, 5, 6
    Total 100%
    Assessment Detail

    1.
    Class Test #1 will be conducted online on an individual basis in Semester week 5 for a duration of 90 minutes and is weighted 10% of the overall course assessment.
    It will comprise a number of true-false and multiple choice questions covering topics 1 to 3 of the course.
    Class Test #1 will seek to assess students understanding of the topics covered in the earlier weeks of the course (weeks 1 to 3) on both a practical and theoretical basis. The test will also include a speed and accuracy component so students will need to work promptly through the given questions.
    Feedback for Class Test #1 will be provided in the form of a mark and access will be given to the student test responses and summary solutions within approximately 2 weeks of the scheduled test time.
    Further details of the requirements for the Class Test #1 assessment task will be provided via MyUni.

    2.
    Class Test #2 will be conducted online on an individual basis in Semester week 8 for a duration of 90 minutes and is weighted 15% of the overall course assessment.
    It will comprise a number of true-false and multiple choice questions covering topics 1 to 5 of the course.
    Class Test #2 will seek to assess students understanding of the topics covered in the semester weeks up to week 5 of the course on both a practical and theoretical basis. The test will also include a speed and accuracy component so students will need to work promptly through the given questions.
    Feedback for Class Test #1 will be provided in the form of a mark and access will be given to the student test responses and summary solutions within approximately 2 weeks of the scheduled test time.
    Further details of the requirements for the Class Test #2 assessment task will be provided via MyUni.

    3.
    The Discussion Forum participation will be conducted on a group basis from semester weeks 4 to 13 and is weighted 20% of the overall course assessment.
    Students will work in groups of a maximum of 5 students from their designated tutorial class that they have self-allocated themselves to. A number of additional questions / comments will be prepared and posted to the Discussion Forum by the Course Coordinator for their designated tutorial class, relating to information relevant to the topics covered in the course. Students are required to either directly respond to the questions / comments posted by the Course Coordinator and / or reply to other student groups who have made a posting regarding the specified question / comment by the Course Coordinator.

    The specific requirements of the Discussion Forum participation assessment task are as follows:
    1) A maximum of 1 posting is to be made by a group for a given Topic.

    2) Only the first 6 postings by each student group will be marked by the Course Coordinator.

    3) Marking will be undertaken and assessed on the following basis:
    a) the originality of the information posted (that is, comments that are directly extracted from an external source regardless of attribution are not what the Course Coordinator is looking for – and is generally very obvious),
    b) the extent to which the information posted ‘adds value’ to the discussion on the topic,
    c) a minimum posting length of 200 words, and
    d) group postings can commence from the start of semester week 4 and are to be completed by the end of week 13.

    Note that individual Topics will only be open for student group postings for a 2-week period.
    Students will need to organise themselves in such a way to ensure all group members participate in this process so that all group members are satisfied with each other’s efforts. An overall group assessment grade (Pass, Credit etc.) will be allocated to this assessment task as the relevant feedback.


    4.
    The Final Exam will be conducted on an individual basis at the end of the semester and is weighted 55% of the overall course assessment.
    It will cover all 10 course topics and consist of a combination of multiple choice, true-false and short-answer questions provided to students. Questions will be provided in the form of statements, scenarios and/or case studies of a nature similar to that included with the course materials. Assessment of the final exam will take into account; the correctness of the student response to the question or task set and the clarity of detailing the process by which the student arrived at their answer including engagement with the course materials.
    Submission
    NA
    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
  • 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.