CORPFIN 7022 - Corporate Finance Theory (M)
North Terrace Campus - Semester 2 - 2014
General Course Information
Course Code CORPFIN 7022 Course Corporate Finance Theory (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 Prerequisites ACCTING 7019, CORPFIN 7005 & COMMERCE 7033 Corequisites ECON 7200 Course Description 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.
Course Coordinator: Associate Professor Jean Canil
The full timetable of all activities for this course can be accessed from Course Planner.
Course Learning OutcomesBy 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
Required ResourcesThe 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 Activities
Learning & Teaching Modes
No information currently available.
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
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 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
Assessment DetailDetailed information will be provided during the course.
SubmissionPresentation 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.
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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