CORPFIN 3503 - Corporate Investment & Strategy III

North Terrace Campus - Semester 1 - 2017

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 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  
    jane.luo@adelaide.edu.au
    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. Apply percent of sales approach to identify external financing needed at a given growth rate, and use formulas and pricing models to measure growth opportunities

    2. Employ various capital budgeting techniques in decision-making

    3. Apply option pricing models including real options methods, to evaluate corporate investments

    4. Utilise leading techniques in valuation of merger and acquisition strategies

    5. Analyse corporate investment decisions in the context of corporate diversification and corporate governance

    6. Identify & apply ethical principles relevant to the finance profession
    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, 11e, McGraw-Hill International, 2016. (NOTE: Previous editions are not suitable).
    Online Learning
    All materials are available on Canvas.
  • 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
    27 Feb 1 Financial policy and growth Ch.3
    6 Mar 2 Valuing growth opportunities
    Tutorials start this week
    Ch. 9 
    EVA.pdf
    Jones.pdf
    Jensen.pdf
    13 Mar 3 Advanced capital budgeting and risk analysis Ch.4 - Ch.7
    20 Mar 4 Options & corporate finance: basic concepts and pricing models Ch. 22
    27 Mar 5 Options & corporate finance: applications Ch.22
    Ch.23
    Online Test #1
    3 Apr 6 Real options Ch. 23
    Mid-semester break
    24 Apr 7 Mergers & acquisitions Ch. 29
    Mitchell.pdf
    1 May 8 Corporate diversification and corporate governance Stowe & Xing. pdf
    Yermack.pdf
    Online Test #2
    8 May 9 Ethics workshop1
    15 May 10 Ethics workshop2
    22 May 11 Ethics workshop3
    29 May 12 Review lecture and tutorials for workshop3
      Note: Reading may be varied during the semester. All .pdf files are uploaded to Canvas.
  • 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
    Online Test 1: 50 minutes Week 5 (see the test annoucement on Canvas for details) 15% 1,2, & 3 All
    Online Test 2: 50 minutes Week 8 (see the test annoucement on Canvas for details) 15% 4,5 & 6 All
    Final Exam: 3 hours, Closed-book See semester 1 exam timetable, when released, for details 70% All All
    Total 100%
    Assessment Related Requirements
    To pass this subject, 50% overall is required (this subject is not 'double pass'). Neither online test is redeemable.
    Assessment Detail
    Online Test 1: Multiple choice questions, covers topics 1-3

    Online Test 2: Multiple choice questions, covers topics 4-6

    Final examination: 3 hour closed-book exam (multiple choice questions/analytical problems/essay questions), covers topics 1-12 including ethics.

    More details will be provided closer to the dates.
    Submission
    Both online tests must be completed within the scheduled time frame and must be genuine attempts.

    Only one attempt is allowed per test.
    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

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