CORPFIN 7005 - Principles of Finance (M)

North Terrace Campus - Trimester 1 - 2020

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.

Open All

Course Details

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

Course Staff

Course Coordinator: Peter Lennox

Name: Mr. Peter Lennox
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

On successful completion of this course, students will be able to:

Explain the financial goal of a firm.
Apply time value of money principles to evaluate investment opportunities.
Apply various capital budgeting techniques to evaluate investment projects.
Determine the required return of different sources of finance.
Compute the weighted average cost of capital of a project or a firm.
Demonstrate the impact of taxes and bankruptcy costs on a firm’s capital 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)	1,2,3,4,5,6
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
Career and leadership readiness technology savvy professional and, where relevant, fully accredited forward thinking and well informed tested and validated by work based experiences	2, 3

Learning Resources

Required Resources

Textbook
Parrino, Au Yong, Dempsey, Morkel-Kingsbury, Ekanayake, James, Murray, Fundamentals of Corporate Finance, 3rd Edition, Wiley, 2019, ISBN 978-0-7303-6346-0.

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.
This is of particular relevance for the time value of money calculations - the relevant function keys include; PV, FV, PMT, n, I/Y, NPV, IRR. Any financial calculator is suitable for this course. The most popular financial calculator is the Sharp EL738 (or its variations).

Recommended Resources

Other 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.
Peirson, Brown, Easton, Howard and Pinder, Business Finance, 11th Edition, McGraw Hill, 2011.
Ross, Drew, Walk, Westerfield and Jordan, Fundamentals of Corporate Finance, 7th Edition, McGraw-Hill, 2016.

Online Learning

This course offering will be delivered via a mix of online and face-to-face teaching.
Each week, unless otherwise specified, a 2-hour recorded lecture (via Echo 360) commencing from semester week 1 and a 50 minute interactive tutorial class will be provided to students.
Note that some of the tutorial classes will be provided on a face-to-face basis with the rest offered online (via Zoom).
Relevant course links for for the online (Zoom) tutorial classes will be provided prior to the commencement of each weeks class via MyUni.
Please refer to the course planner for further details of which tutorial classes are offered face-to-face and which are offered on an online basis.
Learning & Teaching Activities

Learning & Teaching Modes

Seminars
This course will offer one 3-hour seminar per week from trimester week 1 to week 12. The seminar times will generally be informally allocated between a lecture covering the current week topic and a tutorial covering the previous week topic materials. Note that class attendance is an important component of your learning in this course. The communication skills developed in class by regular and active participation in discussions are considered to be most important by the Adelaide Business 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 seminars throughout the trimester.
The University expects full-time students (i.e. those taking 12 units per relevant term) to devote a total of 48 hours per week to their studies. This means that you are expected to commit approximately 9 hours 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 to 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.

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

ssessment Task	Task Type	Due	Weighting	Learning Outcome
Class Test (open book)	Individual	TBC	15%	1, 2, 3, 4
Class Presentation and Peer Review	Group	TBC	25%	1, 2, 3, 4, 5
Final Exam (closed book)	Individual	Exam Period	60%	1, 2, 3, 4, 5, 6
TOTAL			100%

Due to the current COVID-19 situation modified arrangements have been made to assessments to facilitate remote learning and teaching. Assessment details provided here reflect recent updates.

The assessment for this course (detail/percentage) will now be:
Class Test (completed) 15%
Group Presentation and Peer Review (online) 25%
Online final exam 60%

Assessment Detail

Open-book class test to be completed in the trimester week 6 class and will be held over a period of 90 minutes on an individual basis. The test will cover topics 1 to 3 of the course materials. Questions will comprise a combination of true-false, multiple choice, fill-in-the-blanks and short answer (discussion / problem-based) questions. This assessment component is allocated 15% of the total assessment marks for the course.

Class presentation and peer review to be completed on a self-allocated group basis comprising 3 tasks;
i) Group presentation to be delivered in the trimester week 9 class for a duration of no longer than 10 minutes and requires student groups to respond to a given discussion question relevant to the course topic materials. This task is allocated 10% of the total assessment marks for the course. All presentation materials to be submitted for marking immediately following the week 9 class.
ii) Group peer review requires student groups to provide an oral and written critique of another trimester week 9 group presentation. This task is allocated 7.5% of the total assessment marks for the course. The written critique is to be submitted for marking immediately following the week 10 class.
iii) Group problem-based submission requires student groups to provide a written response to a problem-based question. . This task is allocated 7.5% of the total assessment marks for the course.

Closed-book final exam to be completed as scheduled during the university examination period and will be held over a period of 180 minutes plus reading time on an individual basis. The test will cover all 8 topics of the course materials. Questions will comprise a combination of true-false, multiple choice, fill-in-the-blanks and short answer (discussion / problem-based) questions. This assessment component is allocated 60% of the total assessment marks for the course.

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