CORPFIN 3503 - Corporate Investment & Strategy III

North Terrace Campus - Semester 1 - 2016

This course examines techniques and issues in corporate finance with a focus on corporate investment decisions. The course covers several aspects of valuation in a corporate setting: estimation of free cash flow, stock valuation along with recognition of growth opportunities, risk management strategies, estimation of beta using online data, and specifying market scenarios to identify sustainable growth outcomes when evaluating investment proposals. Further topics include merger and acquisition strategies, examination of options embedded in corporate capital structures, incentive-aligning compensation including executive stock options, and techniques for measuring financial performance including Economic Value Added.

  • General Course Information
    Course Details
    Course Code CORPFIN 3503
    Course Corporate Investment & Strategy III
    Coordinating Unit Business School
    Term Semester 1
    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 examines techniques and issues in corporate finance with a focus on corporate investment decisions. The course covers several aspects of valuation in a corporate setting: estimation of free cash flow, stock valuation along with recognition of growth opportunities, risk management strategies, estimation of beta using online data, and specifying market scenarios to identify sustainable growth outcomes when evaluating investment proposals. Further topics include merger and acquisition strategies, examination of options embedded in corporate capital structures, incentive-aligning compensation including executive stock options, and techniques for measuring financial performance including Economic Value Added.
    Course Staff

    Course Coordinator: Dr Jane Luo

    Lecturer-in-charge: Name: Dr Juan (Jane) LUO
    Location:
    Telephone:
    Email:
    Room 12.06, 10 Pulteney St
    8313 0133 (work)
    jane.luo@adelaide.edu.au
    Please address all learning questions to your tutor in the first instance. 
    Course Timetable

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

     

  • Learning Outcomes
    Course Learning Outcomes
    By the end of this course students should be able to:

    • Apply basic strategies and valuation techniques for corporate investment analysis
    • Use formulas and pricing models to measure growth opportunities
    • Discuss how imputation tax system affects investment decisions
    • Apply advanced capital budgeting and valuation techniques, including real options methods, to analyse corporate investment decisions
    • Utilise leading techniques in valuation of merger and acquisition strategies
    • Conduct capital budgeting analysis in the context of corporate governance, corporate diversification, managerial optimisim and myopia
    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)
    1-6
    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
    1-6
    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
    1-6
    Career and leadership readiness
    • technology savvy
    • professional and, where relevant, fully accredited
    • forward thinking and well informed
    • tested and validated by work based experiences
    1-6
    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
    1-6
    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
    1-6
  • Learning Resources
    Required Resources
    The text book for the course is Ross, S., R. Westerfield, J. Jaffe and B. Jordan, Corporate Finance, 10e, McGraw-Hill International, 2013. (NOTE: Previous editions are not suitable).
    Online Learning
    All materials are 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.

    Students in this course are expected to attend all lectures throughout the semester plus one tutorial class each week

    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. As CORPFIN 3503 is a 3 unit course, each week you are expected to commit approximately 9 hours of private study, in addition to the 3 hours attending your lecture and tutorial.
    Learning Activities Summary
    Week beginning Topic # Topic Required Reading
    29 Feb 1 Financial statements analysis & financial models Ch.3
    7 Mar 2 Valuing growth opportunities
    Tutorials start this week
    1. Ch. 9 pp. 273-293
    2. EVA.pdf
    3. Jones.pdf
    4. Jensen.pdf
    14 Mar 3 After-tax cost of capital & dividend imputation 1. BFOT.pdf
    2. BMPR.pdf
    21 Mar 4 Options & corporate finance: basic concepts  Ch. 22 pp. 681-695
    28 Mar Test #1: 1 April, 11.10am in Barr Smith South, 3029, Flentje Lecture Theatre.  
    4 Apr 5 Options & corporate finance: applications
    Tutorials for Topic 4 during this week
    1. Ch. 22 pp. 695-714;
    2. Ch. 23 pp. 726-730
    Mid-semester break
    25 Apr 6 Real options Ch. 23 pp. 730-747
    2 May 7 Mergers & acquisitions 1. Ch. 29
    2. Mitchell.pdf
    9 May Test #2: 13 May, 11.10am in Barr Smith South, 3029, Flentje Lecture Theatre.
    16 May 8  Corporate diversification& Corporate governance
    Tutorials for Topic 7 during this week
    1. Stowe & Xing.pdf
    2. Yermack.pdf
    23 May 9 CEO overoptimism & myopia 1. Heaton.pdf
    2. Stein.pdf
    30 May 10 Guest lecture (Special Topic)
    Course wrap up
    Tutorials for Topic 9 during this week.
      Note: Reading may be varied during the semester. All .pdf files are uploaded to MyUni.
  • 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 1 April, 11.10 am 20% 1,2, & 3 All
    Class Test 2: 50 minutes 13 May, 11.10 am 20% 4,5 & 6 All
    Final Exam: 3 hours, Closed-book Exam period beginning
    18 June. Exam times to be released on Access Adelaide
    60% All All
    Total 100%
    Assessment Related Requirements
    To gain a pass for this course, a mark of at least 50% must be obtained on the final exam as well as a total of at least 50% overall. Students not achieving the minimum final exam mark will be awarded no more than 49. The tests are compulsory and not redeemable. Failure to sit a test without adequate reason will result in zero marks awarded for the test.
    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
  • 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.