CORPFIN 7022 - Corporate Finance Theory (M)

North Terrace Campus - Semester 2 - 2014

The objective of the course is to gain an appreciation of the theoretical controversies surrounding corporate finance policies, leading to formulation of financing strategies. Topics: competing capital structure theories including financial distress and agency costs, dividend policy and taxation, IPOs in both debt and equity markets, motives for convertibles and warrants, valuing real options, rationales for corporate diversification including internal capital markets and agency theory.

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Course Details

Course Code	CORPFIN 7022
Course	Corporate Finance Theory (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
Prerequisites	ACCTING 7019, CORPFIN 7005 & COMMERCE 7033
Corequisites	ECON 7200
Assessment	Exam/assignments/tests/tutorial work as prescribed at first lecture

Course Staff

Course Coordinator: Associate Professor Jean Canil

Course Timetable

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

Course Learning Outcomes

By the end of this course students should be able to:
• Explain and interpret conceptual models and arguments in corporate finance
• Recognize the model appropriate for structuring a given financial problem
• Understanding the data requirements of a chosen model
• Understanding how outputs are sensitive to changed data or assumptions
• Interpreting the results consistent with the model 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)
Knowledge and understanding of the content and techniques of a chosen discipline at advanced levels that are internationally recognised.	1 through 5
The ability to locate, analyse, evaluate and synthesise information from a wide variety of sources in a planned and timely manner.	1 through 5
An ability to apply effective, creative and innovative solutions, both independently and cooperatively, to current and future problems.	1 through 5
Skills of a high order in interpersonal understanding, teamwork and communication.	1 through 5
A proficiency in the appropriate use of contemporary technologies.	1 through 5
A commitment to continuous learning and the capacity to maintain intellectual curiosity throughout life.	1 through 5
A commitment to the highest standards of professional endeavour and the ability to take a leadership role in the community.	1 through 5
An awareness of ethical, social and cultural issues within a global context and their importance in the exercise of professional skills and responsibilities.	1 through 5

Learning Resources

Required Resources

The textbook for the course is Allen, F., R. A. Brealey, and S. C. Myers, Principles of Corporate Finance 10h edition McGraw Hill, 2010. (ABM). You must acquire the 10h edition as material is covered not contained in the 9th edition.

Learning & Teaching Modes

No information currently available.

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 to their studies. This means that you are expected to commit approximately 9 hours for a three-unit course or 13 hours for a four-unit course, of private study outside of your regular classes. Students in this course are expected to attend all lectures throughout the semester plus one tutorial class each week.

Learning Activities Summary

Lecture dates:	Topic:		Readings:
30 July	1	Does debt policy matter?	Ch.17 + Titman.pdf
6 Aug	2	How much should a firm borrow?	Ch.18 pp.448-467
13 Aug	3	The pecking order and Stulz (1990)	Ch.18 pp.467-478 + Lakshmi.pdf; Frank.pdf + additional reading
20 Aug	4	Leases	Ch.25 + distributed readings
27 Aug	5	Convertibles	Ch. 24 pp 617-623 + Mayer.pdf
3 Sept	Class test starting at 3.10 pm and to be held in the lecture theatre No tutorials this week
10 Sept	6	Payout policy	Ch.16 + LaPorta.pdf & Brandon.pdf
17 Sept	7	Equity and debt issues including IPOs	Ch.15 (exclude p. 389 dealing with rights issues) + Loughran and Ritter.pdf
Mid-semester break
8 Oct	Class test starting at 3.10 pm and to be held in the lecture theatre No tutorials this week
15 Oct	8	Executive compensation	Ch.12 pp 295-304 + Core et al.pdf
22 Oct	9	Internal capital markets	Gertner.pdf + Stein.pdf + additional reading
29 Oct	Review Lecture and Tutorials for Topic 9

Note: Reading may be varied during the semester

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

Assessment	Date and time	Weighting	Topics covered	Related learning outcome
Class Test 1: 50 minutes	3 Sept 3.10 pm	10%	1-3	All
Class Test 2: 50 minutes	8 Oct 3.10 pm	10%	4-5	All
Assignment:	15 Oct 3.10pm	15%	6	All
Final Exam: 3 hours, Closed-book	Exam week beginning 8 Nov	65%	All	All

To pass this subject, 50% overall is required. Neither the test nor the assignment, are redeemable.

Assessment Detail

Detailed information will be provided during the course.

Submission

Presentation of Assignments ·
Please must retain a copy of all assignments submitted. · Please attach an ‘Assignment Cover Sheet’, which is signed and dated by you before submission. · All group assignments must be attached to a ‘Group Assignment Cover Sheet’, which must be signed and dated by all group members before submission. All team members are expected to contribute approximately equally to a group assignment. Lecturers can refuse to accept assignments, which do not have a signed acknowledgement of the University’s policy on plagiarism.

Assignment Guidelines including Referencing Details
A copy of the Postgraduate Programs Communication Skills Guide will have been given to you at the beginning of your program. This guide will assist you structure your assignments. This publication also provides guidelines on a range of other important communication skills including writing essays and management reports, making oral presentations etc. In preparing any written piece of assessment for your postgraduate studies it is important to draw on the relevant ‘literature’ to support critical analysis. Also essential is to reference the literature used. Correct referencing is important because it identifies the source of the ideas and arguments that you present, and sometimes the source of the actual words you use, and helps to avoid the problem of plagiarism. (Further information on plagiarism is provided later in this course outline.) The Harvard system is widely used in the Business School. Guidelines for the use of this style of referencing can be found in the Communication Skills Guide. Further assistance with referencing is available from the Faculty’s Learning Support Advisors. The contact details are provided on page 6 of the Communication Skills Guide.

Late Assignment Submission
Students are expected to submit their work by the due date to maintain a fair and equitable system. Extensions will generally only be given for medical or other serious reasons. All requests for extensions must be emailed to the lecturer in charge of the course before the due date. Each request will be assessed on its merits. A late assignment (without prior arrangement) will be penalised by a 5% mark reduction for each day that it is late.

Return of Assignments
Lecturer’s aim to mark and return assignments to students within two (2) weeks of the due date with written feedback. Students are responsible for collecting their marked assignments from the Hub.

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