Unit Guide

General Information

Unit convenor and teaching staff	Unit convenor and teaching staff Unit Convenor / Lecturer Anthony Carlton tony.carlton@mq.edu.au Contact via Email
Credit points	Credit points 2
Prerequisites	Prerequisites (Admission to MAppFin or MAppFin(Adv) or GradDipAppFin) and ECFS866
Corequisites	Corequisites
Co-badged status	Co-badged status
Unit description	Unit description A company's financial strategy requires simultaneous decisions about capital structure, dividend and capital management, cash levels, financial risk profile and target credit rating. All of these decisions must be made in the context of the company's operating performance and growth strategies. Taking the CFO perspective, this unit will give students the opportunity to analyse and develop a company's preferred financial strategy. This unit should appeal to those involved in developing financial strategy for corporations, and investment and corporate bankers who might advise CFO's on financial strategy. The unit also addresses issues in: managing external stakeholders, particularly investor relations; risk allocation between various stakeholders; and the role of complex financial structures. The unit also equips students to evaluate alternative equity raising and capital management transaction structures. Although the unit will take a strategic perspective, students will be able to develop financial modelling skills to support the necessary analysis.

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:

Analyse and explain the types of decisions required to integrate financial strategy that support organisational objectives, and recognise the role of financial markets.
Critically evaluate trade-offs in developing corporate financial strategy, and make appropriate recommendations.
Identify and critically assess the impact of risk on the design of corporate financial strategy.
Explain and critically assess vanilla and non-vanilla financing products in developing financial strategy.
Identify and resolve issues in developing financial strategy for offshore operations

General Assessment Information

To pass this unit the student needs to (1) Achieve an aggregate mark of 50 or more, and; (2) Pass the Final Exam.

Assessment Tasks

Name	Weighting	Hurdle	Due
Pre-unit Assignment	10%	No	First Class
Assignment	35%	No	Refer to iLearn
Final Exam	55%	Yes	Refer to Timetable

Pre-unit Assignment

Due: First Class
Weighting: 10%

Summary of Assessment Task

Individual / Group: Individual.

Due Date: First Class.

Submission Method: At or before the first class. Please bring a copy to class for class use as well.

Duration: Refer to Assignment Coversheet.

Extension Requests:

No extensions will be granted.
There will be a deduction of 10% of the total available marks for each 24 hour period or part thereof. This penalty does not apply for cases in which an application for Special Consideration has been made and approved.
No submission will be accepted after solutions have been discussed or posted by the lecturer. As this normally occurs on day 2 of classes, students need to be aware that submissions are rarely accepted beyond the first 24 hour late period.
Note: Applications for Special Consideration must be made within 5 (five) business days of the due date and time.
Refer to MAFC Program Rules at https://mafcstudents.mq.edu.au/ for information on the University’s Special Consideration Policy.

On successful completion you will be able to:

Analyse and explain the types of decisions required to integrate financial strategy that support organisational objectives, and recognise the role of financial markets.
Explain and critically assess vanilla and non-vanilla financing products in developing financial strategy.

Assignment

Due: Refer to iLearn
Weighting: 35%

Summary of Assessment Task

Individual / Group: Individual.

Due Date: Refer to the unit's iLearn site.

Submission Method: Online via Turnitin on the unit's iLearn site.

Duration: Refer to Assignment Coversheet.

Extension Requests:

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 incurs a 20% penalty). This penalty does not apply for cases in which an application for Special Consideration is made and approved.
Late submissions will be accepted up to 96 hours after the due date and time.
Note: Applications for Special Consideration must be made within 5 (five) business days of the due date and time.
Refer to MAFC Program Rules at https://mafcstudents.mq.edu.au/ for information on the University’s Special Consideration Policy.

Other Information:

The assignment is included in the unit notes.
It will give students the opportunity to apply the techniques used in the unit. It is expected there will be a choice of applications, to cater for individual student interests.
The requirements of the assignment will be further reviewed in class.

On successful completion you will be able to:

Analyse and explain the types of decisions required to integrate financial strategy that support organisational objectives, and recognise the role of financial markets.
Critically evaluate trade-offs in developing corporate financial strategy, and make appropriate recommendations.
Identify and critically assess the impact of risk on the design of corporate financial strategy.

Final Exam

Due: Refer to Timetable
Weighting: 55%
This is a hurdle assessment task (see assessment policy for more information on hurdle assessment tasks)

Summary of Assessment Task

Individual / Group: Individual.

Due Date: Refer to Timetable.

Submission Method: As per MAFC Program Rules at https://mafcstudents.mq.edu.au/.

Duration: 2 hours plus 10 minutes reading time.

Examination Conditions:

All examinations are closed book. However, permitted materials and aids are:
- A study sheet, prepared by the student (one double-sided A4 page), to be advised by the Lecturer prior to the Exam.
- Calculators - permitted calculators are noted under ‘Calculators’ below.
Exam times and locations are noted in the unit timetable at https://www.mq.edu.au/about/about-the-university/faculties-and-departments/business/study-with-us/macquarie-applied-finance-centre/timetables.
Refer to MAFC Program Rules at https://mafcstudents.mq.edu.au/.

Extension Requests:

You are expected to present yourself for examination at the time and place designated in the relevant MAFC Timetable at https://www.mq.edu.au/about/about-the-university/faculties-and-departments/business/study-with-us/macquarie-applied-finance-centre/timetables.
Deferral of an examination is not permitted unless an application for Special Consideration is made and approved.
Students who do not attend receive a mark of zero. This penalty does not apply in cases where an application for Special Consideration has been made and approved.
Note: Applications for Special Consideration must be made within 5 (five) business days of the due date and time.
Refer to MAFC Program Rules at https://mafcstudents.mq.edu.au/ for information on the University’s Special Consideration Policy.

On successful completion you will be able to:

Critically evaluate trade-offs in developing corporate financial strategy, and make appropriate recommendations.
Identify and critically assess the impact of risk on the design of corporate financial strategy.
Explain and critically assess vanilla and non-vanilla financing products in developing financial strategy.
Identify and resolve issues in developing financial strategy for offshore operations

Delivery and Resources

CLASSES

Face-to-Face Teaching: Generally 18 hours.

Timetable: Detailed timetable for classes are available at https://www.mq.edu.au/about/about-the-university/faculties-and-departments/business/study-with-us/macquarie-applied-finance-centre/timetables.

Consultation Times:

Students who wish to contact any of the teaching staff may do so through:

The unit’s iLearn site, in relation to general queries (so that all students may benefit); or
Individual consultation with the lecturer by email in the first instance, if necessary.

REQUIRED AND RECOMMENDED TEXTS AND/OR MATERIALS

Text: Nil

Course Resources:

The unit notes and iLearn contain all the requisite material for the classes, assignments and final examination. The value of the unit will be maximised if you are able to review unit notes and readings prior to classes. Please critically assess the material in these readings, in particular the case studies.
iLearn contains spreadsheet solutions for the problems in the notes, and additional discussion on a number of items. Students should download the spreadsheets prior to class, and you should bring printouts or a laptop to help you follow them in class.
Students should assume any additional readings are examinable unless otherwise advised.

Lecture Notes: Available in printed form and electronically via iLearn.

Case Studies:

There are a number of case studies in the notes (Trees and Portes). Please read these cases before classes, as they will be discussed in class.
Students are not required to solve the cases – this will be done in class.

Pre-unit Materials:

Your time in class will benefit from having read the course material prior to class;
The pre-unit assignment draws on your Corporate Finance material, so should be regarded as an opportunity for quick revision of Corporate Finance notes on financial strategy.

Useful References:

There are books available to help develop your financial modelling skills. Two helpful books are:
- Craig W. Holden, Excel Modelling in Corporate Finance, 2nd ed., Pearson Prentice Hall, 2005; or
- Michael Rees, Financial Modelling in Practice, Wiley, 2008.

Calculators:

A financial calculator that can handle time value of money calculations is required.
In examinations, hand held calculators are permitted. Mobile phones and computers are not permitted.

Assumed Access:

Access to a computer with word processing and spreadsheet capability is assumed, as is general student computer literacy.
Access to a laptop, taken to class, is desirable.

TECHNOLOGY USED AND REQUIRED

Unit iLearn Site:

Found by logging on to iLearn ilearn.mq.edu.au, then clicking on AFCP861 Corporate Financial Strategy.
This is where you will find links to forums, downloadable resources and other important pages.
iLearn forums allow you to communicate with other students and lecturer(s) and may provide supplementary material.
Please post questions to forums at least 24 hours prior to an assignment submission date or an examination date. Questions posted after that time may not be answered. Please try to not leave your questions to the last few days.

Important Notice:

It is important that you familiarise yourself with the unit’s iLearn site.
Students should check the unit’s iLearn site regularly (minimum twice a week and prior to all lectures) and look for updates and distribution of materials (including case studies) related to the unit or assessments and, if relevant, participate in forum discussions.

Unit Schedule

1. ELEMENTS OF FINANCIAL STRATEGY: ALTERNATIVES & TRADEOFFS (2 SESSIONS)

We examine the elements in establishing an integrated financial strategy, including capital structure, dividend policy, cash and risk profile, and how it relates to other key corporate strategies, particularly growth. We review how each element of financial strategy is related to value, and how to make trade-offs between these various elements of financial strategy to develop an overall strategy that best supports organisational strategy and objectives: