CORPFIN 3500 - Corporate Finance Theory III

North Terrace Campus - Semester 2 - 2016

This course looks at theoretical issues in corporate finance and their practical application. Topics include capital structure and the preferences for debt or equity as suggested by agency models, including leases, pecking order theory and timing models; dividend policy; convertible securities and executive compensation; initial public offerings; internal capital markets and diversification.

  • General Course Information
    Course Details
    Course Code CORPFIN 3500
    Course Corporate Finance Theory III
    Coordinating Unit Business School
    Term Semester 2
    Level Undergraduate
    Location/s North Terrace Campus
    Units 3
    Contact Up to 3 hours per week
    Available for Study Abroad and Exchange Y
    Prerequisites CORPFIN 2500 & CORPFIN 2502
    Assumed Knowledge SACE Stage 2 Mathematical Studies
    Course Description This course looks at theoretical issues in corporate finance and their practical application. Topics include capital structure and the preferences for debt or equity as suggested by agency models, including leases, pecking order theory and timing models; dividend policy; convertible securities and executive compensation; initial public offerings; internal capital markets and diversification.
    Course Staff

    Course Coordinator: Dr Jean Canil

    Course Timetable

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

    See LEARNING ACTIVITIES SUMMARY below
  • Learning Outcomes
    Course Learning Outcomes
    By the end of this course students should be able to:
    1. Make and interpret conceptual models and arguments in corporate finance
    2. Identify the model appropriate for structuring a given financial problem
    3. Evaluate the data requirements of a chosen model
    4. Expalin how outputs are sensitive to changed data or assumptions
    5. 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)
    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 through 5
    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
    1 through 5
    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 through 5
    Career and leadership readiness
    • technology savvy
    • professional and, where relevant, fully accredited
    • forward thinking and well informed
    • tested and validated by work based experiences
    1 through 5
    Intercultural and ethical competency
    • adept at operating in other cultures
    • comfortable with different nationalities and social contexts
    • Able to determine and contribute to desirable social outcomes
    • demonstrated by study abroad or with an understanding of indigenous knowledges
    1 through 5
    Self-awareness and emotional intelligence
    • a capacity for self-reflection and a willingness to engage in self-appraisal
    • open to objective and constructive feedback from supervisors and peers
    • able to negotiate difficult social situations, defuse conflict and engage positively in purposeful debate
    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 11th edition McGraw Hill, 2013. (ABM). You must acquire the 11h edition as material is covered not contained in the 10th edition.
    Online Learning
    All material is available on MyUni.
  • Learning & Teaching Activities
    Learning & Teaching Modes
    Lectures supported by problem-solving tutorials developing material covered in lectures.
    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

     

    Week

    Topic #:

    Topic:

    Reading:

    1

    1

    Does debt policy matter?

    Ch.17 + Titman.pdf

    2

    2

    How much should a firm borrow?

    Ch.18 pp.448-467

    3

    3

    The pecking order and Stulz (1990)

    Ch.18 pp.467-478 + Lakshmi.pdf; Frank.pdf + additional reading

    4

    4

    Leases

    Ch.25 + distributed readings

    5

    5

    Convertibles

    Ch. 24 pp 617-623 + Mayer.pdf

           6                      Class test. 9:10am Bonython Hall. Wednesday 31 August.
                                   During usual lecture time - but not in usual lecture theatre
                                   No tutorials this week

    7

    6

    Payout policy

    Ch.16 + LaPorta.pdf & Brandon.pdf

    8

    7

    Equity and debt issues including IPOs

    Ch.15 (exclude p. 389 dealing with rights issues) + Loughran and Ritter.pdf

       Mid-semester break

          9                       No tutorials this week
                                   There will be two test venues - Napier 102 (normal lecture theatre) and 
                                   Mawson Lecture Theatre.

                                   Class test starts at 9:10am.

                                   If your student number is a1647999 or below - go to the Mawson Lecture Theatre

                                   If your student number is a1648000 or higher - go to Napier 102.

                                   We will check your student card. Make sure you attend the correct venue

    10

    8

    Executive compensation

    Ch.12 pp 295-304 + Core et al.pdf

    11

    9

    Internal capital markets

    Gertner.pdf + Stein.pdf + additional reading

          12      Review Lecture and Tutorials for Topic 9

    Note: Reading may be varied during the semester. 

    Specific Course Requirements
    Consultations arranged prior to tests and exams. Otherwise by appointment.
  • 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 Date and time Weighting Topics covered Related learning outcome
    Class Test 1: 50 minutes See Learning and Activities Summary 15 % 1-3 All
    Class Test 2: 50 minutes See Learning and Activities Summary 20% 4-6 All
    Final Exam: 3 hours, Closed-book See Semester 2 exam timetable, when released, for details 65% All All

    To pass this subject, 50% overall is required (this subject is not 'double pass'). Neither test is redeemable.

    Assessment Detail

    No information currently available.

    Submission

    No information currently available.

    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
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