CORPFIN 3503 - Corporate Investment & Strategy III

North Terrace Campus - Semester 1 - 2018

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.

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Course Details

Course Code	CORPFIN 3503
Course	Corporate Investment & Strategy III
Coordinating Unit	Adelaide 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
Assessment	Exam/assignments/tests/tutorial work as prescribed at first lecture

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.

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 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
26 Feb	1	Financial policy and growth	Ch.3
5 Mar	2	Valuing growth opportunities Tutorials start this week	Ch. 9 EVA.pdf Jones.pdf Jensen.pdf
12 Mar	3	Advanced capital budgeting and risk analysis	Ch.4 - Ch.7
19 Mar	4	Options & corporate finance: basic concepts and pricing models	Ch. 22
26 Mar	5	Options & corporate finance: applications	Ch.22 Ch.23
		Online Test #1
		Mid-semester break
16 Apr	6	Real options	Ch. 23
23 Apr	7	Mergers & acquisitions	Ch. 29 Mitchell.pdf
30 Apr	8	Corporate diversification and corporate governance	Stowe & Xing. pdf Yermack.pdf
		Online Test #2
7 May	9	Ethics workshop1
14 May	10	Ethics workshop2
21 May	11	Ethics workshop3
28 May	12	Review lecture and tutorials for workshop3
		Note: Reading may be varied during the semester. All .pdf files are uploaded to Canvas.

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	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
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