Students

AFIN708 – Corporate Finance

2019 – S2 Day

General Information

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Unit convenor and teaching staff Unit convenor and teaching staff Unit Convenor
Wei Cui
refer to iLearn
refer to iLearn
Credit points Credit points
4
Prerequisites Prerequisites
Admission to MRes
Corequisites Corequisites
Co-badged status Co-badged status
Unit description 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 https://www.mq.edu.au/study/calendar-of-dates

Learning Outcomes

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

  • To apply investment and financing concepts to take decisions in business
  • To evaluate cost of capital, project risks and the financial viability of projects
  • To evaluate the effect of capital structure on value of firms and projects
  • To develop research skills in current topics in corporate finance
  • To apply options methodology to value business opportunities and firms.

General Assessment Information

Feedback Prior Census Date: A self-assessment online quiz will be released in Week 3 for feedback prior to the census date. The quiz is not part of the course marks but results provide an indication of whether you are progressing satisfactorily in the unit. If you are having difficulties, please see the Unit Convenor and consider withdrawing before the census date.

Assessment Criteria: the Essay will be assessed against criterion and performance standards set out in a marking Rubric, which will be provided to students by the Unit Convenor. Assessment criteria for all other assessment tasks will be provided on the unit iLearn site.

Viewing Within Session Assessment Task Marks: 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 release of final results regarding assessment marks (not including the final exam) will not be addressed.

 

Assessment Tasks

Name Weighting Hurdle Due
Assessed Coursework 5% No random weeks
Class Test 20% No Week 8
Essay 15% No Week 10
Final Examination 60% No See Exam Timetable

Assessed Coursework

Due: random weeks
Weighting: 5%

Task Description:  Each collection is worth a maximum of 2.5%. There will be two random collections during the semester. To get full marks students need to add some insight to the standard solution. Students who copy the text-book solution word for word will receive 0 marks. Type of Collaboration: Individual Submission:  In class Format: Refer to iLearn Length: Refer to iLearn 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:
  • To apply investment and financing concepts to take decisions in business
  • To evaluate cost of capital, project risks and the financial viability of projects
  • To evaluate the effect of capital structure on value of firms and projects
  • To apply options methodology to value business opportunities and firms.

Class Test

Due: Week 8
Weighting: 20%

Task Description: 

The 65-minute "closed book" in-class test will be conducted in week 8. Further instructions will be provided on iLearn before the test. 

The test will help you to monitor your progress in accomplishing learning outcomes 1, 2 and 3.

Type of Collaboration: Individual Submission:  In class Format: Theoretical and calculation questions in the multiple choice format  Length: 65-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:
  • To apply investment and financing concepts to take decisions in business
  • To evaluate cost of capital, project risks and the financial viability of projects
  • To evaluate the effect of capital structure on value of firms and projects

Essay

Due: Week 10
Weighting: 15%

Task Description: 

Students will be asked to select one topic for research from a set of prescribed topics. Based on detailed literature review, the students will prepare an essay.  

It will be graded based on logical development of content and arguments, effective use of research evidence, clear conclusions, clarity in writing and appropriate citations and references.

Type of Collaboration: Individual Submission:  The essay will be submitted through Turnitin before the due date. Format: Essay Length: The word limit is 2500 words excluding table of contents and bibliography.   Inherent Task Requirements: Refer to iLearn Late Submission: Tasks above 10% - 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. 

On successful completion you will be able to:
  • To develop research skills in current topics in corporate finance

Final Examination

Due: See Exam Timetable
Weighting: 60%

Task Description:  The content of the "closed book" final exam will give greater weight to topics covered later in the course (that is, topics not covered by the class test). Students will be permitted one 'Reference Sheet' in the examination room comprising ONE A4 page of paper containing reference material printed on both sides. The material may be handwritten and/or typed. The page will not be returned to students at the end of the final examination. No separate formula sheet will be provided. Type of Collaboration: Individual Submission:  During examination period Format: Refer to iLearn Length: 120 minutes plus 10 minutes of 'reading' time 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:
  • To apply investment and financing concepts to take decisions in business
  • To evaluate cost of capital, project risks and the financial viability of projects
  • To evaluate the effect of capital structure on value of firms and projects
  • To develop research skills in current topics in corporate finance
  • To apply options methodology to value business opportunities and firms.

Delivery and Resources

Required Text:

Ross, Westerfield and Jaffe. Corporate Finance, 11th Edition, McGraw Hill Irwin. ISBN:9780077861759

The prescribed text can be purchased from the Macquarie University Co-op Bookshop.

Unit Web Page:

AFIN808-iLearn:

The unit Website is only available to students enrolled in AFIN808 and AFIN708. 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:help@mq.edu.au

 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.
  • Assignment
  • Suggested answers and solutions to homework questions
  • Results — for assignment and other assessable material.
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.
Delivery Format and Other Details:

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: http://www.timetables.mq.edu.au/

Attendance at seminars is a compulsory component of the Unit, and students are expected to attend all classes.

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.

Recommended Readings:  
Other Course Materials:   

 

Unit Schedule

 
Week  Topics

Ross et al. Chapters

1 TOPIC 1- Overview of corporate finance and valuation  1, 4, 5
2 TOPIC 2- Project evaluation and project risk analysis  6, 7 (not sec. 7.3)
3 TOPIC 3-  Alternative theories on risk and return  11,12
4

TOPIC 4- Capital structure and limits to use of debt

 16, 17

5 TOPIC 5 - Valuation and capital budgeting for levered firm  18
6 TOPIC 6 - Raising capital and dividend policy  19, 20
7

TOPIC 7 - Convertible bonds, warrants and lease finance

29.13; BMA* 32
 

MID-SEMESTER BREAK 

 
8 Mid- Semester Test (No lecture) See above  
 9

TOPIC 8 - Corporate finance applications of options - I

22

10 TOPIC 9 -  Corporate finance applications of options - II  23 and JP Ch. 22**
11 TOPIC 10 - Mergers, acquisitions and divestitures 29
12 TOPIC 11 - Project & Infrastructure Financing Reading on the iLearn
13 TOPIC 12 - Private Equity & Corporate Restructuring AND  Exam Overview 29.13, BMA* 32

* BMA Ch. 32 - Brealey, Myers and Allen (2014), Principles of Corporate Finance, 11e, McGraw-Hill Irwin.

**JP Ch. 22 – Jonathan Berk, Peter DeMarzo (2013), Corporate finance, 3e, Pearson Global Edition.

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 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

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

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

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 apply investment and financing concepts to take decisions in business
  • To evaluate cost of capital, project risks and the financial viability of projects
  • To evaluate the effect of capital structure on value of firms and projects
  • To apply options methodology to value business opportunities and firms.

Assessment tasks

  • Assessed Coursework
  • Class Test
  • Final Examination

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 apply investment and financing concepts to take decisions in business
  • To evaluate cost of capital, project risks and the financial viability of projects
  • To evaluate the effect of capital structure on value of firms and projects
  • To develop research skills in current topics in corporate finance
  • To apply options methodology to value business opportunities and firms.

Assessment tasks

  • Assessed Coursework
  • Class Test
  • Essay
  • Final Examination

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 outcome

  • To develop research skills in current topics in corporate finance

Assessment task

  • Essay