CORPFIN 7005 - Principles of Finance (M)

North Terrace Campus - Semester 1 - 2016

This course introduces you to the world of modern finance, especially to the financial operations of a business. It covers the concepts of time value of money, basic asset valuation, risk and return paradigm, capital budgeting and financing decisions. Upon completion, students will be able to value bonds and stocks, estimate asset returns according to their risk characteristics and identify capital projects that maximize shareholder's wealth using a wide range of analytical tools. They will also develop a good understanding on how firms finance their capital expenditure and the levels of dividends and other payouts for their shareholders.

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Course Details

Course Code	CORPFIN 7005
Course	Principles of Finance (M)
Coordinating Unit	Adelaide Business School
Term	Semester 1
Level	Postgraduate Coursework
Location/s	North Terrace Campus
Units	3
Contact	Up to 5 hours per week
Available for Study Abroad and Exchange	Y
Corequisites	ACCTING 7019
Assumed Knowledge	COMMERCE 7033
Assessment	Exam/assignments/tests/tutorial work as prescribed at first lecture

Course Staff

Course Coordinator: Associate Professor Chee Cheong

Name: Dr Chee Cheong (Lecturer-in-Charge)
Location: Room 12.41, Nexus 10, Adelaide SA 5005
Telephone: 8313 0356 (work)
Email: chee.cheong@adelaide.edu.au

Name: Mr Peter Lennox (Lecturer)
Email: peter.lennox@adelaide.edu.au

Course Timetable

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

Course Learning Outcomes

The basic objective of this finance foundation course is to summarise the fundamental theoretical aspects of finance relevant to the future study of finance and application within a range of profession including accounting and property valuation issues.

By the end of this course students should be able to:

Explain the financial goal governing a firm’s decisions
A deep understanding of the concepts of time value of money and its application to various valuation models to value long-term debt, preference shares and ordinary shares
Explain the importance, role and techniques of capital budgeting in a project or firm
Understand risk and return, diversifiable and non-diversifiable risk, and asset pricing models
Understand how to determine the cost of capital of a project or firm
Explain operating and financial leverage, and implications for the target capital structure
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)	1,2,3,4,5,6
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	2,3,4,5,6
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	1,2,3,4,5,6, 7
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	7
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	7

Learning Resources

Required Resources

Textbook
Ross, Christensen, Drew and Bianchi, Fundamentals of Corporate Finance, 6th Edition, McGraw-Hill, 2013.

Calculator
This course requires considerable mathematical computation. Although much of it is relatively simple, access to an appropriate calculator is necessary. If you intend to purchase a calculator for this course, you will find it useful to purchase a financial calculator.

Recommended Resources

Reference Books

Berk, DeMarzo, Harford, Ford, Mollica & Finch, Fundamentals of Corporate Finance, 2nd edition, Pearson, 2013.
Brigham and Houston, Fundamentals of Financial Management, 13th Edition, Thomson, 2013.
Pierson, Brown, Easton, Howard and Pinder, Business Finance, 11th Edition, McGraw Hill, 2011.
Learning & Teaching Activities

Learning & Teaching Modes

Lectures, Tutorials & Workshops
This course will offer 2-hour lecture per week from week 1 to week 12. In addition to the lectures, 1 hour tutorial class will be offered from week 2 until week 12 and 2-hour workshop will be offered over 6-week period.

Tutorials & Workshops
Tutorial classes will be held weekly from week 2 to 12. Workshops will be held weekly from week 7 to 12. Membership of tutorial (workshop) classes is to be finalised by the end of the second week of semester. Students wishing to swap between tutorial (workshop) classes after this time are required to present their case to the Lecturer-in-Charge, but should be aware that such a request may not be approved.

Tutorials and workshops are an important component of your learning in this course. The communication skills developed in tutorials/workshops by regularly and actively participating in discussions are considered to be most important by the School and are highly regarded by employers and professional bodies.

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, tutorials and workshops throughout the semester.
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.

Learning Activities Summary

The schedule of lecture topics for this course is as follows:
Topic 1: Introduction Issues in Corporate Finance – the scope and activities of corporate finance, principles roles of corporate finance manager & the key objective of financial management.

Topic 2: Valuing Bonds and Shares – introduction to bonds, valuation of bonds, introduction to shares & valuation of shares.

Topic 3: Capital Budgeting – introduction to various capital budgeting criteria, application of criteria to investment proposals, advantages and disadvantages of each criteria.

Topic 4: Cash Flow Estimation and Analysis of Risk – determination of relevant cash flows for investment analysis, sources of risk in cash flow forecasting, assessment of forecasting risk, implications of management options in project evaluation.

Topic 5: Risk and Return, and Capital Market Efficiency – introduction to the concept of expected returns & volatilities for individual assets and for portfolios of assets, a brief discussion about efficient market hypotheses.

Topic 6: Portfolio Management and Asset Pricing – introduction to the concept of diversification strategy, Capital Asset Pricing Model, Arbitrage Pricing Model & empirical models.

Topic 7: Cost of Capital – determination of cost of equity, cost of preference share, cost of debt and weighted average cost of capital (WACC).

Topic 8: Capital Structure and Leverage – introduction to common types of long term capital, Modigliani and Miller capital structure decision, effects of corporate taxes and effects of financial distress.

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	Due Date and Time	Weighting	Related Learning Outcome
Test 1	TBA	10%	1 – 2
Workshop Ethics Presentation & Test	TBA	15%	7
Test 2	TBA	10%	1 – 5
Final Exam (closed book)	TBA	65%	1 – 7
Total		100%

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
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