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AFIN102 – Finance 1B

2019 – S1 Evening

General Information

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Unit convenor and teaching staff Unit convenor and teaching staff Unit Convenor and Lecturer
Dr Chris Meier
E4A Level 2 for consultation
Refer to iLearn
Credit points Credit points
3
Prerequisites Prerequisites
ACST101 or WACT101
Corequisites Corequisites
Co-badged status Co-badged status
Unit description Unit description
This unit introduces students to the financial sector, preparing them for more advanced studies in finance, and developing their interest in a career in finance. It explains the theories, principles and methods used in financial decision-making by individuals, financial institutions and companies, and applies them to the real world using current examples and market data. It further explores financial institutions and markets, and other real world considerations that affect financial transactions of individuals, financial institutions, companies and governments in a modern economy. This is an interesting and relevant unit for students intending to undertake further studies in any area of business and economics, and is required for further studies in finance. Students without a background of at least HSC Mathematics (2 Unit) or equivalent are strongly advised to have studied MATH123 prior to enrolling in this unit.

Important Academic Dates

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

Learning Outcomes

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

  • Understand how financial concepts are expressed in mathematical formulas and then applied in valuing equity, debt, property and business projects.
  • Understand the importance of law, independence and objectivity of information when working in the finance industry.
  • Apply financial theory to real world corporate and personal financial decisions.
  • Confidently read and discuss financial publications.
  • Work productively in a group to successfully complete a financial analysis.

General Assessment Information

Details: Assessment criteria for all assessment tasks will be provided on the unit ilearn site.

Questions: Subject-related questions whose answer is useful to everyone should be posted to the iLearn discussion board. Questions of a personal nature can be emailed to the teachers.

Marks in gradebook: It is the responsibility of students to view their marks for each 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 tasks (not including the final exam mark) will not be addressed.

Assessment Tasks

Name Weighting Hurdle Due
Tutorial test 5% No Week 3
Mid semester class test 25% No Week 6
Group assignment 20% No Week 10
Final Exam 50% No See Exam Timetable

Tutorial test

Due: Week 3
Weighting: 5%

Task Description:  Please use this assessment task as an indicator of whether you are progressing satisfactorily in the unit. If you are having difficulties, please see your tutor or lecturer in consultation or the Peer Assisted Learning (PAL) teacher for more help, or consider withdrawing from the subject before the census date on Friday of week 4. Type of Collaboration: Individual Submission:  In class Format: 10 multiple choice questions. Length:  40 minutes Inherent Task Requirements: Refer to iLearn Late Submission: 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:
  • Understand how financial concepts are expressed in mathematical formulas and then applied in valuing equity, debt, property and business projects.
  • Understand the importance of law, independence and objectivity of information when working in the finance industry.

Mid semester class test

Due: Week 6
Weighting: 25%

Task Description:  This will cover topics covered from weeks 1 to 5. Type of Collaboration: Individual Submission:  In class Format: 25 multiple choice questions Length: 1 hour and 30 minutes Inherent Task Requirements: Refer to iLearn Late Submission: 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:
  • Understand how financial concepts are expressed in mathematical formulas and then applied in valuing equity, debt, property and business projects.
  • Understand the importance of law, independence and objectivity of information when working in the finance industry.
  • Apply financial theory to real world corporate and personal financial decisions.

Group assignment

Due: Week 10
Weighting: 20%

Task Description:  The assignment topic will be announced during the course of the semester. Further details will be released on iLearn. 50% of the marks will be allocated to individual performance.  Type of Collaboration: Groups may contain 2 to 4 members, but no more. Submission:  Online via iLearn Format: Refer to iLearn Length: Refer to iLearn Inherent Task Requirements: Refer to iLearn Late Submission: No extensions will be granted. There will be a deduction of 10% 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 – 20% penalty). This penalty does not apply for cases in which an application for special consideration is made and approved. No submission will be accepted after solutions have been posted.
On successful completion you will be able to:
  • Understand how financial concepts are expressed in mathematical formulas and then applied in valuing equity, debt, property and business projects.
  • Understand the importance of law, independence and objectivity of information when working in the finance industry.
  • Apply financial theory to real world corporate and personal financial decisions.
  • Confidently read and discuss financial publications.
  • Work productively in a group to successfully complete a financial analysis.

Final Exam

Due: See Exam Timetable
Weighting: 50%

Task Description:  The exam will be based on the entire course. A formula sheet will be provided. The exam is closed book. Notes are not allowed to be brought into the exam. Many practice exams will be made available online.  Type of Collaboration: Individual Submission:  In class during examination period Format: Refer to iLearn Length: 2 hours Inherent Task Requirements: Refer to iLearn Late Submission: 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:
  • Understand how financial concepts are expressed in mathematical formulas and then applied in valuing equity, debt, property and business projects.
  • Understand the importance of law, independence and objectivity of information when working in the finance industry.
  • Apply financial theory to real world corporate and personal financial decisions.

Delivery and Resources

Required Text: Fundamentals of Corporate Finance (3rd Edition) by Berk, Demarzo, Harford, Ford, and Mollica, published by Pearson. A copy of the book is reserved in the library. 
Unit Web Page: Course materials are available on iLearn including lecture notes, tutorial questions, answers and readings.
Technology Used and Required:  
Delivery Format and Other Details: See timetable for classes on the University web site at:  http://www.timetables.mq.edu.au/
Recommended Readings:

For students who are looking for other learning resources, the following textbook can be sought, but it's not compulsory:

Corporate Finance (11th Edition) by Ross, Westerfield, Jaffe, and Jordan, published by McGraw Hill.

The Charted Financial Analyst (CFA) institute also has some useful resources: http://www.cfainstitute.org/learning/products/onlinelearning/Pages/60499.aspx?WPID=BrowseProducts

Other Course Materials: 

MyFinanceLab:

Subscription to MyFinanceLab is highly recommended. Not only you can get immediate feedback on the assignment questions, but also rich sources of practice questions on all the topics covered by the textbook. You may also test yourself on any topic at any time. MyFinanceLab can generate your personalised study plan based on your results on assignments or tests. For all the problems you require additional information, it will link you to step-to-step guided solutions, animations, and links to relevant sections of the textbook for review of material.

Information on the registration on MyFinanceLab for AFIN 102 will be on iLearn.

Homework:

Homework questions are available from the accompanying study platform of the textbook MyFinanceLab (http://www.pearson.com/mylab). Answers and detailed explanations are provided on the website after selecting an answer option. A copy of each assignment and solution will be also made available on iLearn. You should complete the assignment every week before tutorial classes.

Unit Schedule

Tentative schedule:

Week Begins Activity Chapters
1 25/2/19 Lecture 1: Structural Forms of Firms and Interest Rates 1,5
2 4/3/19 Lecture 2: Bond Valuation, Corporate Bond Ratings, and Investment Decision Rules 6, 8.3-8.7
3 11/3/19 Lecture 3: Incremental Cash Flows and Project Valuation 9
4 18/3/19 Lecture 4: Review of Dividend Discount Models, Discounted Cash Flow Models and Multiples  7, 10
5 25/3/19 Lecture 5: Fundamentals of Portfolio Management 11
6 1/4/19 Mid-Semester Test  
7 8/4/19 Lecture 6: Systematic Risk and the Equity Risk Premium 12
Recess 15/4/19 Recess  
Recess 22/4/19 Recess  
8 29/4/19 Lecture 7: Cost of Capital 13
9 6/5/19 Lecture 8: Long-Term Capital Financing 14,15
10 13/5/19 Lecture 9: Capital Structure 16
11 20/5/19 Lecture 10: Payout Policy 17
12 27/5/19 Lecture 11: Mergers and Acquisitions 18
13 3/6/19 Lecture 12: Revision  

Tutorial questions will be made available on iLearn. 

Learning and Teaching Activities

Lectures and Tutorials

The unit is delivered through weekly lectures and tutorial classes. Tutorial questions will be posted to iLearn. Students should complete tutorial questions in advance since teachers will progress at the rate preferred by those students who have attempted the work. Teachers welcome questions and enjoy discussions of the concepts. Answers to the tutorial questions will be posted on iLearn after each week.

Homework

Weekly homework and review of prerequisite course are essential to be successful in the unit. Homework questions and solutions will be available on both iLearn and MyFinanceLab. Please complete the homework independently and check your answer with the standard solution provided. If you have access to MyFinanceLab, you will get immediate feedback of all the questions of the homework. You can also work on more practice problems on MyFinanceLab.

Expectation from Students

To achieve the best possible results in this unit: Try not to miss a lecture or tutorial class. This subject moves very fast and each week builds on the one before. Do as many practice questions as possible. Bring the lecture notes and tutorial questions to class and raise questions with your teachers. Talk about the topics with your friends and relatives. Many people enjoy friendly discussions about property, shares, leverage, taxes and interest rates.

Policies and Procedures

Macquarie University policies and procedures are accessible from Policy Central (https://staff.mq.edu.au/work/strategy-planning-and-governance/university-policies-and-procedures/policy-central). Students should be aware of the following policies in particular with regard to Learning and Teaching:

Undergraduate students seeking more policy resources can visit the Student Policy Gateway (https://students.mq.edu.au/support/study/student-policy-gateway). It is your one-stop-shop for the key policies you need to know about throughout your undergraduate student journey.

If you would like to see all the policies relevant to Learning and Teaching visit Policy Central (https://staff.mq.edu.au/work/strategy-planning-and-governance/university-policies-and-procedures/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/study/getting-started/student-conduct​

Results

Results published on platform other than eStudent, (eg. iLearn, Coursera etc.) or released directly by your Unit Convenor, are not confirmed as they are subject to final approval by the University. Once approved, final results will be sent to your student email address and will be made available in eStudent. For more information visit ask.mq.edu.au or if you are a Global MBA student contact globalmba.support@mq.edu.au

Supplementary Exams

Further information regarding supplementary exams, including dates, is available here

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 Enquiry Service

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

If you are a Global MBA student contact globalmba.support@mq.edu.au

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

For help with University computer systems and technology, visit http://www.mq.edu.au/about_us/offices_and_units/information_technology/help/

When using the University's IT, you must adhere to the Acceptable Use of IT Resources 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

  • Understand how financial concepts are expressed in mathematical formulas and then applied in valuing equity, debt, property and business projects.
  • Understand the importance of law, independence and objectivity of information when working in the finance industry.
  • Confidently read and discuss financial publications.

Assessment tasks

  • Tutorial test
  • Mid semester class test
  • Final Exam

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:

Assessment tasks

  • Mid semester class test
  • Group assignment
  • Final Exam

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

  • Understand the importance of law, independence and objectivity of information when working in the finance industry.
  • Apply financial theory to real world corporate and personal financial decisions.
  • Confidently read and discuss financial publications.
  • Work productively in a group to successfully complete a financial analysis.

Assessment task

  • Group assignment

Effective Communication

We want to develop in our students the ability to communicate and convey their views in forms effective with different audiences. We want our graduates to take with them the capability to read, listen, question, gather and evaluate information resources in a variety of formats, assess, write clearly, speak effectively, and to use visual communication and communication technologies as appropriate.

This graduate capability is supported by:

Learning outcomes

  • Understand the importance of law, independence and objectivity of information when working in the finance industry.
  • Apply financial theory to real world corporate and personal financial decisions.
  • Confidently read and discuss financial publications.
  • Work productively in a group to successfully complete a financial analysis.

Assessment task

  • Group assignment

Capable of Professional and Personal Judgement and Initiative

We want our graduates to have emotional intelligence and sound interpersonal skills and to demonstrate discernment and common sense in their professional and personal judgement. They will exercise initiative as needed. They will be capable of risk assessment, and be able to handle ambiguity and complexity, enabling them to be adaptable in diverse and changing environments.

This graduate capability is supported by:

Learning outcomes

  • Apply financial theory to real world corporate and personal financial decisions.
  • Work productively in a group to successfully complete a financial analysis.

Changes since First Published

Date Description
11/03/2019 Small edit: In a previous amendment, an inconsistency regarding the mid-semester test was fixed. In this amendment the respective relevant material for this mid-semester test were adjusted. Since the test is in week 6, material from ween 1-5 are covered, not 1-7.
06/03/2019 There was a discrepancy regarding the week of the mid-semester test. In the assessment summary, Week 8 was given, and in the weekly schedule week 6 was provided. Based on the information provided by Angela Chow, the venues are booked for 2 April (Week 6). Hence, I have made a change to consistently show "Week 6" for the mid-semester test.