Print Version - Units - Macquarie University

AFIN808 Corporate Finance S1 Day 2013 Applied Finance and Actuarial Studies

Contents General Information

2

Learning Outcomes

3

Assessment Tasks

3

Delivery and Resources

4

Unit Schedule

6

Policies and Procedures

7

Graduate Capabilities

8

Research and Practice

10

Changes since First Published

10

Disclaimer Macquarie University has taken all reasonable measures to ensure the information in this publication is accurate and up-to-date. However, the information may change or become out-dated as a result of change in University policies, procedures or rules. The University reserves the right to make changes to any information in this publication without notice. Users of this publication are advised to check the website version of this publication [or the relevant faculty or department] before acting on any information in this publication.

http://unitguides.mq.edu.au/unit_offerings/40853/unit_guide/print

1

Unit guide AFIN808 Corporate Finance

General Information Unit convenor and teaching staff Lecturer Peter Kavalamthara [email protected] Contact via [email protected] By appointment via email Unit Convenor Edward Watts [email protected] Contact via [email protected] Credit points 4 Prerequisites ACCG611 and (ACST603 or AFIN858) or admission to MCom or MIntBus or MEc or MActPrac prior to 2011 Corequisites Co-badged status Unit description The objective of this unit is to explore the theory and application of corporate finance issues at an advanced level, and to equip students with the required depth of knowledge and skill expected of a professional. Following a brief revision of basic financial concepts covered in earlier finance courses, the unit investigates the more complicated theoretical issues and analytical techniques in corporate finance. In particular, a critical approach is adopted which involves identifying the assumptions and limitations of these techniques when applied to the real world. Students are encouraged to understand that often the best method is a matter of debate, and that they must choose a method from a group of methods all of which have various limitations. This critical approach is reinforced by examining a number of real life corporate finance projects.

Important Academic Dates Information about important academic dates including deadlines for withdrawing from units are available at http://students.mq.edu.au/student_admin/enrolmentguide/academicdates/


2


Learning Outcomes 1. To understand basic investment and finance concepts. 2. To be competent in applying capital budgeting techniques. 3. To understand the role of the risk-return relationship and market efficiency. 4. To have a good understanding of the effects of leverage and of capital structure theory. 5. To be able to understand the value of flexibility and a real options approach. 6. To be able to evaluate finance theories critically.

Assessment Tasks Name

Weighting

Due

Class Test

20%

Week 8

Presentation

10%

Allocated week

Report

10%

9am on Monday, Week 10, May 6

Final Exam

60%

See Exam Timetable

Class Test Due: Week 8 Weighting: 20% A 1 hour in class test covering Topics 1 - 5, with approximately 25% multiple choice and 75% short answer / theory questions. Students must attend their assigned class in completing the inclass test. This Assessment Task relates to the following Learning Outcomes: • To understand basic investment and finance concepts. • To be competent in applying capital budgeting techniques. • To understand the role of the risk-return relationship and market efficiency. • To be able to evaluate finance theories critically.

Presentation Due: Allocated week Weighting: 10% Each week during the course students are given a number of problems to solve, where these problems relate to the previous week's Topic. At the beginning of the semester students are


3


formed into groups of 5, and each of these groups is assigned to a week. Each group will discuss the questions, provide and explain the solution, and provide overheads which can be uploaded to ilearn. 3% of the mark will be awarded based on each individuals performance. This Assessment Task relates to the following Learning Outcomes: • To be able to evaluate finance theories critically.

Report Due: 9am on Monday, Week 10, May 6 Weighting: 10% This assessment task requires students to gather information, to synthesise arguments presented in articles, and to think deeply, about a current relatively controversial issue in the corporate finance area. Maximum length is 5 pages, double spaced on A4 paper, excluding the bibliography. The Report should be uploaded to ilearn/turnitin by 9am on Monday, Week 10, May 6. A hardcopy of the Report should be submitted. Late assignments will be penalised by a 20% seduction for each day late. This Assessment Task relates to the following Learning Outcomes: • To understand the role of the risk-return relationship and market efficiency. • To be able to evaluate finance theories critically.

Final Exam Due: See Exam Timetable Weighting: 60% In order to pass the unit, students must pass the final exam. This Assessment Task relates to the following Learning Outcomes: • To understand basic investment and finance concepts. • To be competent in applying capital budgeting techniques. • To understand the role of the risk-return relationship and market efficiency. • To have a good understanding of the effects of leverage and of capital structure theory. • To be able to understand the value of flexibility and a real options approach. • To be able to evaluate finance theories critically.

Delivery and Resources CLASSES The Unit involves 3 hours face-to-face teaching per week consisting of a 3 hour seminar.The timetable for classes can be found on the University website at:


4


http://www.timetables.mq.edu.au/ There will be thirteen lectures conducted in the following classes: Mon

Room E7B 263, 6pm to 9pm Lecturer: Peter John

Wed

Room E5A 170, 10am to 1pm Lecturer: Peter John

Fri

Room E7B 263, 10am to 1pm Lecturer: Edward Watts

Fri

Room E5A 170, 2pm to 5pm Lecturer: Edward Watts

Attendance at seminars is acompulsory component of the Unit, and students are expected to attend all classes. If a student misses more than 2 classes then they could be given a written warning that nonattendance can lead to a Fail grade. Further absence at classes can trigger a recommendation of a Fail grade in the Unit.

REQUIRED AND RECOMMENDED TEXTS AND/OR MATERIALS Prescribed Brealey, Myers and Allen, Principles of Corporate Finance, 10th Edition, McGraw Hill Irwin. The prescribed text can be purchased from the Macquarie University Co-op Bookshop.

UNIT WEB PAGE The unit Website is only available to students enrolled in AFIN808. It will be available from Sunday 24 February.Students will be able to access the unit web page by the use of their normal university user/password details. Please contact the IT Help Desk if you have any difficulties accessing the unit web page: Phone:(02)9850HELP(4357) Option1 or Freecall:1800063191 FacetoFace: ITHelpDesk, C5C244 24/7Email:[email protected]

The Website will contain important unit materials, including: ·

Course details — An outline of the unit, including assessment tasks

·

Announcements—notices updating students on important matters regarding the unit.


5


·

Assignment

·

Suggested answers and solutions to homework questions

·

Results — for assignment and other assessable material.

LEARNING AND TEACHING ACTIVITIES This is meant to be a 2nd unit in corporate finance. Most students will have completed an introductory financial management / corporate finance unit. As a more advanced unit, some of the topics covered will be familiar to students but we will be covering them at a more in - depth level. Some other topics will be completely new. As in the introductory unit, students need to work through the quantitative and other problems which are selected each week from the text. However, an important objective of this unit is to make the student aware of the limitations of financial theory and of the assumptions made in making finance and investment decisions.

TECHNOLOGY USED AND REQUIRED The Text book provides access to various on-line resources. Further, a number of the class exercises are designed to be completed using excel. Students are encouraged to use excel when attempting these exercises.

Unit Schedule Week

Date of

Topics

BrealeyMyers

Week Beg

Problems

Chapters

1

Feb 25

The Scope of Corporate Finance

1, 33, 2

1:7,8 / 33:8,13 / 2:15,18,30,35

2

Mar 4

Valuation and Capital Budgeting

3, 4, 5, 6

3:29,31 / 4:25,28 / 5:15,16 / 6:20,24,33

3

Mar 11

Risk and Return

7, 8, 9

7: 5,7,14 / 8:4,8,11,24 /9:11,12,20

4

Mar 18

Market Efficiency

11, 13

11:2,8,10,17 /13:5,11,17,22


6


5

Mar 25

Signalling and Information Assymetry

TBA

6

Apr 1

Capital Structure 1

17

17:1,2,9,11,19,22,24

7

Apr 8

Capital Structure 2

18, 19

18:1,5,21,22,23 /19:1,2,7,17,19,25

8

Apr 15

Equity and Debt

14, 15, 16, 23, 24

15:10,17,19 /16:15,21,23 /23:1,10,12 /24:14,24,29

SEMESTER BREAK 9

Apr 29

Uncertainty in Capital Budgeting

10, 20

10:9,13,18,21 /20:6,7,11,16,23

10

May 6

Real Options

21, 22

21:5,11,18,28 /22:5,11,13

11

May 13

Mergers and Acquisitions

31, 32

31:2,3,6,9,12,17 /32:1,12,15

12

May 20

Project Financing and Asset Backed Securities.

TBA

TBA

13

May 27

Revision

Policies and Procedures Macquarie University policies and procedures are accessible from Policy Central. Students should be aware of the following policies in particular with regard to Learning and Teaching: Academic Honesty Policy http://www.mq.edu.au/policy/docs/academic_honesty/policy.html Assessment Policy http://www.mq.edu.au/policy/docs/assessment/policy.html Grading Policy http://www.mq.edu.au/policy/docs/grading/policy.html Grade Appeal Policy http://www.mq.edu.au/policy/docs/gradeappeal/policy.html Grievance Management Policy http://mq.edu.au/policy/docs/grievance_management/policy.html Special Consideration Policy http://www.mq.edu.au/policy/docs/special_consideration/policy.html In addition, a number of other policies can be found in the Learning and Teaching Category of Policy Central.


7


Student Support Macquarie University provides a range of Academic Student Support Services. Details of these services can be accessed at: http://students.mq.edu.au/support/

UniWISE provides: • Online learning resources and academic skills workshops http://www.students.mq.edu.au/support/learning_skills/ • Personal assistance with your learning & study related questions. • The Learning Help Desk is located in the Library foyer (level 2). • Online and on-campus orientation events run by Mentors@Macquarie.

Student Enquiry Service Details of these services can be accessed at http://www.student.mq.edu.au/ses/.

Equity Support Students with a disability are encouraged to contact the Disability Service who can provide appropriate help with any issues that arise during their studies.

IT Help If you wish to receive IT help, we would be glad to assist you at http://informatics.mq.edu.au/ help/. When using the university's IT, you must adhere to the Acceptable Use Policy. The policy applies to all who connect to the MQ network including students and it outlines what can be done.

Graduate Capabilities PG - Research and Problem Solving Capability Our postgraduates will be capable of systematic enquiry; able to use research skills to create new knowledge that can be applied to real world issues, or contribute to a field of study or practice to enhance society. They will be capable of creative questioning, problem finding and problem solving. This graduate capability is supported by:

Learning outcomes • To understand the role of the risk-return relationship and market efficiency. • To have a good understanding of the effects of leverage and of capital structure theory. • To be able to understand the value of flexibility and a real options approach. • To be able to evaluate finance theories critically.


8


Assessment tasks • Class Test • Presentation • Report • Final Exam

PG - Discipline Knowledge and Skills Our postgraduates will be able to demonstrate a significantly enhanced depth and breadth of knowledge, scholarly understanding, and specific subject content knowledge in their chosen fields. This graduate capability is supported by:

Learning outcomes • To understand basic investment and finance concepts. • To be competent in applying capital budgeting techniques. • To understand the role of the risk-return relationship and market efficiency. • To have a good understanding of the effects of leverage and of capital structure theory. • To be able to understand the value of flexibility and a real options approach. • To be able to evaluate finance theories critically.


PG - Critical, Analytical and Integrative Thinking Our postgraduates will be capable of utilising and reflecting on prior knowledge and experience, of applying higher level critical thinking skills, and of integrating and synthesising learning and knowledge from a range of sources and environments. A characteristic of this form of thinking is the generation of new, professionally oriented knowledge through personal or group-based critique of practice and theory. This graduate capability is supported by:

Learning outcomes • To be competent in applying capital budgeting techniques. • To understand the role of the risk-return relationship and market efficiency. • To have a good understanding of the effects of leverage and of capital structure theory.


9


• To be able to understand the value of flexibility and a real options approach. • To be able to evaluate finance theories critically.


PG - Capable of Professional and Personal Judgment and Initiative Our postgraduates will demonstrate a high standard of discernment and common sense in their professional and personal judgment. They will have the ability to make informed choices and decisions that reflect both the nature of their professional work and their personal perspectives. This graduate capability is supported by:

Learning outcomes • To be able to understand the value of flexibility and a real options approach. • To be able to evaluate finance theories critically.

Assessment tasks • Presentation • Report • Final Exam

Research and Practice Research and Practice • This unit uses research from external sources (references) • This unit gives you practice in applying research findings in your assignments • This unit gives you an opportunity to learn software used in industry. There are two aspects of the Unit involving research and practice. Firstly, students are expected to read journal articles and newspapers to develop their capacity to critically analyse publ;ished forecasts. Secondly, students use the industry-standard @RISK package.

Changes since First Published Date

Description

24/01/2013

The Prerequisites was updated.


10

Print Version - Units - Macquarie University

Print Version - Units - Macquarie University

Suggest Documents