CORPFIN 7005NA - Principles of Finance (M)

Ngee Ann Academy - Trimester 2 - 2017

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.

  • General Course Information
    Course Details
    Course Code CORPFIN 7005NA
    Course Principles of Finance (M)
    Coordinating Unit Adelaide Business School
    Term Trimester 2
    Level Postgraduate Coursework
    Location/s Ngee Ann Academy
    Units 3
    Available for Study Abroad and Exchange N
    Corequisites ACCTING 7019NA
    Assumed Knowledge COMMERCE 7033NA
    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 Staff

    Course Coordinator: Associate Professor Chee Cheong

    Dr. Chee Cheong
    12.41, Nexus 10
    Business School - Accounting and Finance
    The University of Adelaide
    Nexus 10, Adelaide
    SA AUSTRALIA 5005
    Ph : +61 8 8313 0356
    Fax : +61 8 8223 4782
    e-mail: chee.cheong@adelaide.edu.au
    http://www.adelaide.edu.au/directory/chee.cheong
    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:
    Berk, DeMarzo, Harford, Ford, Mollica & Finch, Fundamentals of Corporate Finance, 2nd Edition (Australian version), Pearson Australia.

    Calculator:
    This course requires considerable mathematical computation. If you intend to purchase a calculator for this course, you will find it useful to purchase a financial calculator.
    Recommended Resources
    Reference Books

    Ross, Thompson, Christensen, Westerfield and Jordan, Fundamentals of Corporate, 6th Edition.

    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 Modes
    This course will offer 2 intensive seminars. In each intensive seminar, lecturer will go through about five topics.

    Workload

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

    The University expects full-time students (i.e. those taking 12 units per semester) to devote a total of 48 hours per week (over 12 weeks) to their studies. This means that you are expected to commit approximately 108 hours (9 hours x 12 week) for a three-unit course of private study outside of your intensive seminars. Students are expected to attend both intensive seminars.
    Learning Activities Summary
    The schedule of topics for this course is as follows:

    TOPIC    TOPICS AND SUB-TOPICS

    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.

    2. Valuing Bonds and Shares – introduction to bonds, valuation of bonds, introduction to shares & valuation of shares.

    3. Capital Budgeting – introduction to various capital budgeting criteria, application of criteria to investment proposals, advantages and disadvantages of each criteria.

    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.

    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.

    6. Portfolio Management and Asset Pricing – introduction to the concept of diversification strategy and Capital Asset Pricing Model.

    7. Cost of Capital – determination of cost of equity, cost of preference share, cost of debt and weighted average cost of capital (WACC).

    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.

    9. Dividend Policy – distribution to shareholders in dividends and share repurchases.

  • 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 Tests 30%
    Final Exam 70%
    Total 100%
    Assessment Detail
    Test 1 will cover topics 1 and 2.
    Test 2 will cover topics 1 to 5.
    Final Exam will cover all topics in the course.
    Submission
    N/A
    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.