Unit Guide

General Information

Unit convenor and teaching staff	Unit convenor and teaching staff Unit Convenor Lindsay Stubbs lindsay.stubbs@mq.edu.au Contact via Email N/A 9:00am - 11:00am, Thursdays in E4B 104 commencing Week 1. (Weeks 1 -13 only) Sessional Lecturer Miss Yunping Chen yunping.chen@mq.edu.au Contact via Email N/A To be advised. Lurion De Mello lurion.demello@mq.edu.au
Credit points	Credit points 3
Prerequisites	Prerequisites (ACCG100 or ACCG105 or ACCG106) and (ECON111 or BBA103) and (STAT170 or STAT171 or PSY122) and ACST101 and (24cp or GPA of 2.25)
Corequisites	Corequisites
Co-badged status	Co-badged status
Unit description	Unit description This unit provides an introduction to the fundamental principles of finance and forms a gateway to more advanced studies in asset pricing, derivative securities, portfolio management and corporate finance. After completing this unit, students have foundation knowledge in investment valuation, risk and return, capital budgeting, corporate financial policy such as financing decisions and dividend policy, derivatives securities, and no-arbitrage valuation. The unit promotes graduate capabilities in critical, analytical and integrative thinking; and problem solving and research within the context of finance. While this unit has similar topic coverage to AFIN253, it provides a more rigorous approach and requires a higher level of quantitative ability.

Important Academic Dates

Information about important academic dates including deadlines for withdrawing from units are available at https://www.mq.edu.au/study/calendar-of-dates

Learning Outcomes

On successful completion of this unit, you will be able to:

A broad introduction to applied financial analysis and management.
An understanding of some of the key concepts of modern finance.
An ability to apply finance theory to simple real-life problems.
An ability to use the accounts of listed Australian companies and calculate key market-related figures.

General Assessment Information

To be eligible to pass this unit, a pass is required in the final examination.

A Standardised Numerical Grade (SNG) gives you an indication of how you have performed within the band for your descriptive grade. The SNG is not a mark, and you may not be able to work it out based on your raw examination and other assessment marks. Nor are you able to determine you are “one mark away” from a different grade.”

It is the responsibility of students to view their marks for each within session assessment on iLearn within 20 working days of posting. If there are any discrepancies, students must contact the unit convenor immediately. Failure to do so will mean that queries received after the release of final results regarding assessment marks (not including the final exam mark) will not be addressed.”

Assessment Tasks

Name	Weighting	Due
Quiz	5%	Week 4
Group Project	20%	To be advised
Class Test	15%	11th and 12th September 2014
Final Examination	60%	University Examination Period

Quiz

Due: Week 4
Weighting: 5%

An Online Quiz will be held in Week 4. This Online Quiz serves the purpose of a Diagnostic Test and is designed to give students early feedback. It will cover Topics 1 and 2. It will be launched on Sunday 24th August 2014 and will close on Sunday 31st August 2014.

No extensions will be granted. Students who have not submitted the task prior to the deadline will be awarded a mark of 0 for the task, except for cases in which an application for special consideration is made and approved.

On successful completion you will be able to:

A broad introduction to applied financial analysis and management.
An understanding of some of the key concepts of modern finance.
An ability to apply finance theory to simple real-life problems.

Group Project

Due: To be advised
Weighting: 20%

This is a two part group project. Each group can consist a minimum of 2 members and a maximum of 3 members. The Group needs to be the same for the two parts (Part A and Part B)

Part A - Australian Banks (10%)

A study of some listed Australian banks and one unlisted building society. This is a Group Project: Minimum if 2 members, maximum of 3 members.

Part B - Capital Budgeting (10%)

A capital budgeting exercise on a fictitious Australian company. This is a Group Project: Minimum of 2 members and a maximum of 3 members.

No extensions will be granted. Late tasks will be accepted up to 72 hours after the submission deadline. There will be a deduction of 20% of the total available marks made from the total awarded mark for each 24 hour period or part thereof that the submission is late (for example, 25 hours late in submission – 40% penalty). This penalty does not apply for cases in which an application for special consideration is made and approved.

On successful completion you will be able to:

A broad introduction to applied financial analysis and management.
An understanding of some of the key concepts of modern finance.
An ability to apply finance theory to simple real-life problems.
An ability to use the accounts of listed Australian companies and calculate key market-related figures.

Class Test

Due: 11th and 12th September 2014
Weighting: 15%

The Class Test test will be based on the first four topics. It will be held in lectures. It is important that you attend the lecture for which you are enrolled.

On successful completion you will be able to:

A broad introduction to applied financial analysis and management.
An understanding of some of the key concepts of modern finance.
An ability to apply finance theory to simple real-life problems.
An ability to use the accounts of listed Australian companies and calculate key market-related figures.

Final Examination

Due: University Examination Period
Weighting: 60%

The Final examination will cover the whole syllabus of the unit.

You are permitted ONE A4 page of paper containing reference material printed on both sides. The material may be handwritten or typed. The page will not be returned at the end of the final examination.

On successful completion you will be able to:

A broad introduction to applied financial analysis and management.
An understanding of some of the key concepts of modern finance.
An ability to apply finance theory to simple real-life problems.
An ability to use the accounts of listed Australian companies and calculate key market-related figures.

Delivery and Resources

Classes

Each week there will be a two hour lecture and a one hour tutorial. You should attend all lectures and tutorials. Please note that tutorials start in Week 1, namely on Tuesday 5th August 2014, Thursday 7th August 2014 and Friday 8th August 2014. Questions for Tutorial 1 will be posted on iLearn and sent to you by email. Weekly tutorials cover material based on the lecture of the previous week.
Solutions to tutorial questions (both from the text book and the Extra Tutorial Problems) will be posted on iLearn at the end of each week.
The timetable for classes can be found on the University web-site at: http://www.timetables.mq.edu.au/ .
Your attendance at tutorials is very important.

Prizes

There is a Macquarie University Applied Finance and Actuarial Studies Prize for the best student in this subject. Please see the following web-site

http://www.businessandeconomics.mq.edu.au/undergraduate_degrees/prizes_scholarships

Required and Recommended Texts and/or Materials

The prescribed text is:

Fundamentals of Corporate Finance, 6h edition, by S. Ross, R. Bianchi, M. Christensen, M. Drew, R. Westerfield and B. Jordan.

Publisher: McGraw-Hill Irwin, 2014.

ISBN: 9780071013192 (pbk.)

The text can be purchased from the Macquarie University Co-op Bookshop, and is available in the Macquarie University Library.

Technology Used and Required

During the semester, you may be asked to access web-sites of certain Australian companies and also the web-site for the Australian Securities Exchange at www.asx.com.au .

Calculators: Financial calculators may be used in any examination for this unit. A financial calculator is not essential, as a scientific one should meet all your needs. You will not be asked to calculate Internal Rate of Return (IRR) in an examination. Financial calculators are able to do this. Only non-programmable calculators are allowed in an examination

If you choose to buy a financial calculator and are planning to enrol in the Chartered Financial Analysts (CFA) course after you graduate from Macquarie University, you may wish to purchase a financial calculator that meets CFA examination requirements. For specific requirements, see the CFA Institute’s web-site, www.cfainstitute.org . The two CFA-approved calculators are:

Texas Instruments BA II Plus (including BA II Plus Professional);
Hewlett Packard 12C (including Hewlett Packard 12C Platinum).

Another recommended calculator is the Hewlett Packard HP17BII or HP17BII+. This is used in Macquarie University’s Master of Applied Finance program.

Unit Web Page

Course material is available on iLearn.
The web page for this unit can be found at: https://ilearn.mq.edu.au/login/MQ/

Learning and Teaching Activities

Lecture and Tutorials

Each week there will be a two hour lecture and a one hour tutorial. In the tutorial, the tutor will go through some of the questions set for that week. They will be based on the lecture material for the preceding week. It is important that you attempt the tutorial problems before you come to class.

What is expected of students

To achieve the best possible results in this unit, students should:

Attend all lectures.
Attend all tutorials and do assigned problems before the class.
Read the assigned chapters of the text book.
Download a copy of each lecture’s PowerPoint slides which will be made available before each lecture. Make sure these are brought to lectures.
Most of the tutorial problems will be drawn from the text book. There will be extra tutorial problems placed on iLearn requiring you to find out certain information about Australian companies and answer questions relating to what you have found.

You are not required or expected to buy the e-Resources asociated with the text book

Unit Schedule

LECTURES

Week	Topic	Chapter	Title of Chapter	Week Beginning
1	1	1	Introduction to corporate finance	4 August 2014
2	2	6	Valuing shares and bonds	11 August 2014
3	3	7	Net present value and other investment criteria	18 August 2014
4	4	10	Lessons from capital market history	25 August 2014
5	5	11	Return, risk and the Security Market Line	1 September 2014
6	6	8	Making capital investment decisions	8 September 2014
7	7	12	Current investment decisions	15 September 2014
8	8	17	Shareholder value and the cost of capital.	6 October 2014
9	9	18	Rewarding shareholders: setting dividend policy	13 October 2014
10	10	19	Financial leverage and capital structure policy	20 October 2014
11	11	20	Derivative Securities - Options	27 October 2014
12	12	20	Derivative Securities - Futures	3 November 2014
13			Revision	10 November 2014

TUTORIALS

Students should complete all of the questions listed below prior to the relevent tutorial. These are from the text book. In addition, extra tutorial questions will be issued during the semester based on market-related calculations. In the week before the relevant tutorial these will be posted on iLearn.

Tutorial	Chapter	Week Beginning	Questions and Problems from the End of the Chapters
1	Introduction	4 August 2014	Questions for Tutorial 1 will be posted on iLearn.
2	1	11 August 2014	7, 9, 12,15
3	6	18 August 2014	7, 8, 11, 12, 15, 18, 21, 25
4	7	25 August 2014	1, 3, 11, 13, 15, 16, 23, 24
5	10	1 September 2014	1, 2, 4, 8, 9, 19, 22
6	11	8 September 2014	1, 2, 5, 7, 10, 12, 16, 21
7	8	15 September 2014	1, 5, 6, 7, 8, 10, 11, 14
8	12	6 October2014	1, 3, 4, 5, 16, 18
9	17	13 October 2014	1, 2, 3, 5, 9, 13, 16, 18
10	18	20 October 2014	2, 10, 11, 12, 18,
11	19	27 October 2014	1, 2, 3, 6, 8, 9, 13, 14, 17
12	20	3 November 2014	1, 3, 4, 7
13	20	10 November 2014	25, 29, 30

Additional tutorial questions on market-related matters may be posted on iLearn and emailed to your student email account.

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://mq.edu.au/policy/docs/academic_honesty/policy.html

Assessment Policy http://mq.edu.au/policy/docs/assessment/policy.html

Grading Policy http://mq.edu.au/policy/docs/grading/policy.html

Grade Appeal Policy http://mq.edu.au/policy/docs/gradeappeal/policy.html

Grievance Management Policy http://mq.edu.au/policy/docs/grievance_management/policy.html

Disruption to Studies Policy http://www.mq.edu.au/policy/docs/disruption_studies/policy.html The Disruption to Studies Policy is effective from March 3 2014 and replaces the Special Consideration Policy.

In addition, a number of other policies can be found in the Learning and Teaching Category of Policy Central.

Student Code of Conduct

Macquarie University students have a responsibility to be familiar with the Student Code of Conduct: https://students.mq.edu.au/support/student_conduct/

Academic Honesty

The nature of scholarly endeavour, dependent as it is on the work of others, binds all members of the University community to abide by the principles of academic honesty. Its fundamental principle is that all staff and students act with integrity in the creation, development, application and use of ideas and information. This means that:

all academic work claimed as original is the work of the author making the claim
all academic collaborations are acknowledged
academic work is not falsified in any way
when the ideas of others are used, these ideas are acknowledged appropriately.

Further information on the academic honesty can be found in the Macquarie University Academic Honesty Policy at http://www.mq.edu.au/policy/docs/academic_honesty/policy.html

Grades

Macquarie University uses the following grades in coursework units of study:

HD - High Distinction
D - Distinction
CR - Credit
P - Pass
F - Fail

Grade descriptors and other information concerning grading are contained in the Macquarie University Grading Policy which is available at:

http://www.mq.edu.au/policy/docs/grading/policy.html

Grading Appeals and Final Examination Script Viewing

If, at the conclusion of the unit, you have performed below expectations, and are considering lodging an appeal of grade and/or viewing your final exam script please refer to the following website which provides information about these processes and the cut off dates in the first instance. Please read the instructions provided concerning what constitutes a valid grounds for appeal before appealing your grade.

http://www.businessandeconomics.mq.edu.au/new_and_current_students/undergraduate_current_students/how_do_i/grade_appeals/

http://www.businessandeconomics.mq.edu.au/current_students/undergraduate/how_do_i/special_consideration

Student Support

Macquarie University provides a range of support services for students. For details, visit http://students.mq.edu.au/support/

Learning Skills

Learning Skills (mq.edu.au/learningskills) provides academic writing resources and study strategies to improve your marks and take control of your study.

Student Services and 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.

Student Enquiries

For all student enquiries, visit Student Connect at ask.mq.edu.au

IT Help

For help with University computer systems and technology, visit 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.

Graduate Capabilities

Discipline Specific Knowledge and Skills

Our graduates will take with them the intellectual development, depth and breadth of knowledge, scholarly understanding, and specific subject content in their chosen fields to make them competent and confident in their subject or profession. They will be able to demonstrate, where relevant, professional technical competence and meet professional standards. They will be able to articulate the structure of knowledge of their discipline, be able to adapt discipline-specific knowledge to novel situations, and be able to contribute from their discipline to inter-disciplinary solutions to problems.

This graduate capability is supported by:

Learning outcomes

A broad introduction to applied financial analysis and management.
An understanding of some of the key concepts of modern finance.
An ability to apply finance theory to simple real-life problems.
An ability to use the accounts of listed Australian companies and calculate key market-related figures.

Assessment tasks

Quiz
Group Project
Class Test
Final Examination

Critical, Analytical and Integrative Thinking

We want our graduates to be capable of reasoning, questioning and analysing, and to integrate and synthesise learning and knowledge from a range of sources and environments; to be able to critique constraints, assumptions and limitations; to be able to think independently and systemically in relation to scholarly activity, in the workplace, and in the world. We want them to have a level of scientific and information technology literacy.

This graduate capability is supported by:

Learning outcomes

A broad introduction to applied financial analysis and management.
An understanding of some of the key concepts of modern finance.
An ability to apply finance theory to simple real-life problems.
An ability to use the accounts of listed Australian companies and calculate key market-related figures.

Assessment tasks

Quiz
Group Project
Class Test
Final Examination

Problem Solving and Research Capability

Our graduates should be capable of researching; of analysing, and interpreting and assessing data and information in various forms; of drawing connections across fields of knowledge; and they should be able to relate their knowledge to complex situations at work or in the world, in order to diagnose and solve problems. We want them to have the confidence to take the initiative in doing so, within an awareness of their own limitations.

This graduate capability is supported by:

Learning outcomes

A broad introduction to applied financial analysis and management.
An understanding of some of the key concepts of modern finance.
An ability to apply finance theory to simple real-life problems.
An ability to use the accounts of listed Australian companies and calculate key market-related figures.

Assessment tasks

Quiz
Group Project
Class Test
Final Examination

Creative and Innovative

Our graduates will also be capable of creative thinking and of creating knowledge. They will be imaginative and open to experience and capable of innovation at work and in the community. We want them to be engaged in applying their critical, creative thinking.

This graduate capability is supported by:

Learning outcomes

A broad introduction to applied financial analysis and management.
An understanding of some of the key concepts of modern finance.
An ability to apply finance theory to simple real-life problems.

Assessment task

Group Project

Changes from Previous Offering

The Group Project is now split into two parts. Students can form different groups for the second part if they wish to. Students are not required to nor are expected to buy the e-Resources associated with the text book.

Research and Practice

This unit gives you opportunities to conduct your own research into some companies listed on the Australian Securities Exchange (ASX), showing you how to find key information from the companies' accounts and then to apply this in certain calculations.