Subject Outline 2021 PDF

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School of Business FIN 222: Corporate Finance Subject Outline 6 credit points

Subject Information Autumn, 2021, All Campuses On Campus / On Line This subject has both On Campus and Online Remote Study options as detailed in the Lecture & Tutorial Sections of this outline. Please note that all subjects, where necessary, can be undertaken online, to accommodate changing circumstances and individual requirements for academic consideration. Information about remote study options in this subject can be found on your subject Moodle site.

Lecture Information: Mondays, 10:30 - 12:30, Pre-recorded lecture Pre-requisites: FIN 111 AND ACCY111 Co-requisites: Nil Restrictions: None Contact Hours: Please refer to subject timetable/subject's Moodle site for contact hours detail Online Subject Material: http://www.uow.edu.au/student/index.html

Faculty Vision, Mission and PRME The Mission of the Faculty is to promote responsible leadership and sustainable business practice, and contribute to a stronger economy and a more just society. The Faculty Vision, Mission and Values statements can be found at https://business.uow.edu.au/vision-mission/index.html The Faculty is also a signatory to the Principles of Responsible Management Education (PRME) and supports the realisation of the United Nations Sustainable Development Goals. More information on PRME can be found at https://business.uow.edu.au/about/index.html

FIN 222 Subject Outline

Autumn, 2021, All Campuses

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Teaching Staff Teaching Role

Coordinator, Lecturer and Tutor

Name

Dr Aelee Jun

Telephone

02 4221 5077

Email

[email protected]

Room

40.321

Consultation Times

Tuesday 10:30 - 12:30 (via Zoom) Wednesday 10:00 - 12:00 (via Zoom)

Teaching Role

South Western Sydney - Tutor

Name

Professor Millicent Chang

Telephone

02 4298 1169

Email

[email protected]

Room

40.336 (Wollongong campus)

Consultation Times

To be Advised

Expectations of Students UOW values are intellectual openness, excellence and dedication, empowerment and academic freedom, mutual respect and diversity, recognition and performance. We will provide a safe, equitable and orderly environment for the University community, and expect each member of our community to behave responsibly and ethically (UOW Student Conduct Rules https://documents.uow.edu.au/about/policy/learning/index.html ). We expect that students demonstrate these values and professional behaviour, both face to face and online, making genuine efforts to complete their studies successfully, arriving on time to class, taking part constructively in class discussions and activities, demonstrating appropriate professional and ethical conduct in all communication with UOW staff and community members, and submitting assignments on time (or completing a request for Academic Consideration in advance if needed).

Email Etiquette: Consultation with your subject coordinator and/or teachers via email Your teachers receive many emails each day. In order to enable them to respond to your emails appropriately and in a timely fashion, students are asked to observe basic requirements of professional communication: Consider what the communication is about • • •

Is your question addressed elsewhere (e.g. in this subject outline or, where applicable, on the subject's eLearning site)? Is it something that is better discussed in person or by telephone? This may be the case if your query requires a lengthy response or a dialogue in order to address. If so, see consultation times above and/or schedule an appointment. Are you addressing your request to the most appropriate person?

Specific email title/ header to enable easy identification of subject related/ student emails •

Identify the subject code of the subject you are enquiring about (as your teacher may be involved in more than one subject) in the email header. Add a brief, specific header after the subject code where appropriate.

FIN 222 Subject Outline

Autumn, 2021, All Campuses

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Professional courtesy • • • •

•

Address your teacher appropriately by name (and formal title if you do not yet know them). Use full words (avoid 'text-speak' abbreviations), correct grammar and correct spelling. Be respectful and courteous. Academics will normally respond within 1-2 business days. If the matter is urgent, you may wish to telephone the teaching staff whose contact details are given in this subject outline or contact the School. Please ensure that you include your full name and identify your seminar or tutorial group in your email so that your teachers know who they are communicating with and can follow-up personally where appropriate.

Cyber Bullying The University is committed to providing a safe, respectful, equitable and orderly environment for the University community, and expects each member of that community to behave responsibly and ethically. Students must comply with the University's Student Conduct Rules and related policies including the IT Acceptable Use Policy and Bullying Prevention Policy, whether undertaking their studies face-to-face, online or remotely. For more information on appropriate communication and etiquette in the online environment please refer to the guide Online and Email Etiquette or at https://www.uow.edu.au/student/learning-co-op/technology-andsoftware/email-etiquette/.

Copyright Commonwealth of Australia Copyright Regulations 1969 © 2021 University of Wollongong The original material prepared for this guide is covered by copyright. Apart from fair dealing for the purposes of private study, research, criticism or review, as permitted under the Copyright Act, no part may be reproduced by any process without written permission.

FIN 222 Subject Outline

Autumn, 2021, All Campuses

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Table of Contents Section A: General Information .......................................................................................................................... 5 Learning Outcomes ............................................................................................................................................ 5 Student Learning Outcomes .......................................................................................................................... 5 Subject Description ....................................................................................................................................... 5 Course Learning Outcomes ........................................................................................................................... 5 eLearning, Readings, References and Materials ................................................................................................ 5 Subject eLearning ......................................................................................................................................... 5 Major Text(s) ................................................................................................................................................ 6 Recommended Background and Further Reading ......................................................................................... 6 Additional Materials ..................................................................................................................................... 6 Lectures, Tutorials and Attendance Requirements ............................................................................................ 7 Lecture Times * ............................................................................................................................................ 7 Lecture Program *......................................................................................................................................... 7 Lecture Recording.............................................................................................................................................. 7 Your Privacy - Lecture Recording ..................................................................................................................... 8 Tutorial/Seminar/Workshop Times ............................................................................................................... 9 Tutorial/Seminar/Workshop Program ........................................................................................................... 9 Attendance Requirements - Participation/Contribution to Lectures/Tutorials/Seminars/Workshops .............. 10 Recent Improvements to Subject ..................................................................................................................... 10 Extraordinary Changes to the Subject Outline ................................................................................................. 10 Learning Analytics ........................................................................................................................................... 10 Section B: Assessment ........................................................................................................................................ 11 Assessment Summary ...................................................................................................................................... 11 UOW Grade Descriptors ............................................................................................................................. 13 Assessment Learning Outcome Matrix ............................................................................................................ 14 Minimum Performance Requirements ............................................................................................................. 14 Types of Assessment and Collaboration .......................................................................................................... 15 Submission, Retention and Collection of Written Assessment ........................................................................ 15 Submitting Assessment Tasks ..................................................................................................................... 15 Extensions ................................................................................................................................................... 16 Faxing, Posting and Emailing Assessment Work ....................................................................................... 16 Late Submission of Assessment Tasks........................................................................................................ 16 Collection .................................................................................................................................................... 16 Retention ..................................................................................................................................................... 16 Scaling ............................................................................................................................................................. 16 Supplementary Assessment ............................................................................................................................. 16 Review and Appeal of Academic Decisions .................................................................................................... 17 Assessment Quality Cycle ............................................................................................................................... 17 Assurance of Learning (What will students learn in their degree?) ................................................................. 17 Academic Integrity .......................................................................................................................................... 17 Plagiarism Prevention ................................................................................................................................. 17 Referencing ...................................................................................................................................................... 18 Why do you need to reference?................................................................................................................... 18 The Harvard System of Referencing ........................................................................................................... 18 Section C: General Advice for Students - Policies and Procedures ................................................................ 18

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Section A: General Information Learning Outcomes Student Learning Outcomes On successful completion of this subject, students will be able to: 1. 2. 3. 4. 5. 6.

Demonstrate an understanding of how financial systems work and calculate the value of different types of cash flow streams including financial assets such as shares and bonds. Demonstrate an understanding of risk, return and the Capital Asset Pricing Model and be able to quantify risk and return and calculate the cost of equity. Evaluate the value of productive assets using a range of capital budgeting techniques. Calculate the cost of capital and other quantitative measures used in working capital management decision. Compute, interpret and apply diverse quantitative measures in making an optimal and socially responsible investment decision. Explain capital structure and dividend policy and their impact on the value of a company.

Subject Description The objective of this subject is to provide an introduction to the fundamental quantitative techniques and underlying concepts and theories in investment, financing and working capital management decisions facing corporations. For students to successfully complete this subject, students are required to be able to compute, interpret and apply a range of quantitative measures in order to assist in making optimal financial decisions as well as understand the fundamental concepts and theories in finance. The main topics covered in this subject include financial mathematics, valuation of financial and productive assets, risk and return, cost of capital, working capital management, capital structure and dividend policy. Course Learning Outcomes Course Learning Outcomes can be found in the Course Handbook https://www.uow.edu.au/handbook/index.html.

eLearning, Readings, References and Materials Subject eLearning The University uses the eLearning system Moodle to support all coursework subjects. The subject Moodle site can be accessed via: https://moodle.uowplatform.edu.au/course/view.php?id=23365 IN ADDITION TO THE UOW ONLINE WOLLONGONG DISTANCE MOODLE SITE YOU WILL ALSO HAVE ACCESS TO THE REMOTE STUDY SUPPORT SITE. Remote Study Support Moodle site (TCHR054_20) is accessible to support your studies from remote locations around the globe until you can return to on campus study. This site will appear as an additional site on your list of active Moodle subject sites. This site contains comprehensive information with a range of resources related to teaching and learning as well as other student support information.

FIN 222 Subject Outline

Autumn, 2021, All Campuses

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Major Text(s) Berk, J, Demarzo, P, Harford, J, Ford, G, Mollica, V & Hull, J 2019, FIN222 Fundamentals of Corporate Finance, Custom edition for the University of Wollongong, Pearson (ISBN: 9781488658051, $134.95) Textbook details are available online from the University Bookshop at https://unishop.uow.edu.au/ Recommended Background and Further Reading Brealey, RA, Myers, SC & Allen, F 2019, Principles of Corporate Finance, 13th edn, McGraw-Hill. Parrino, R, Au Yong, HH, Dempsey, M, Morkel-Kingsbury, N, Ekanayake, S, James, J & Murray, J 2019, Fundamentals of Corporate Finance, 3rd edn, Wiley Ross, SA, Trayler, R, Bird, R, Westerfield, RW & Jordan, BD 2020, Essentials of Corporate Finance, 5th edn, McGraw-Hill. This is not an exhaustive list of references. Students should also use the library catalogue and databases to locate additional resources. Additional Materials Spreadsheets and Calculators All accounting and finance subjects involve problems requiring calculation. Many of these can be solved using a scientific calculator (addition, subtraction, division, multiplication, powers, square roots, logarithms and exponentials, statistical functions) and students should make sure they have access to such a calculator at the beginning of each subject. Students will also find a range of statistical, scientific and financial functions in electronic spreadsheets like Microsoft Excel, and these are useful for the preparation of submitted work where manual calculation is not strictly required or recommended. However, students should also consider purchasing a financial calculator. These offer nearly all of the functions found in scientific calculators, as well as compound interest and discounting, amortization, bond yields and investment appraisal functions (including net present value and the internal rate of return). Students will find these are of great benefit in their studies and their future careers. Be advised that any calculator used in tests and examinations must be approved by the university. See the list of eligible models from the following link. http://www.uow.edu.au/content/groups/public/@web/@gov/documents/doc/uow123705.pdf

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Autumn, 2021, All Campuses

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Lectures, Tutorials and Attendance Requirements Lecture Times * Lectures will be held on: Day

Start Time

End Time

Room

Monday

10:30

12:30

Pre-recorded lecture

Lecture Program * Week Date

Topics Covered

Readings

Emergency Evacuation Procedures 1

01 Mar 2021

Time Value of Money: Valuing Cash Flow Streams

All readings are from the major text, Berk et al (2019, custom edition). Chapter 4

2

08 Mar 2021

Interest Rates Bond Valuation

Chapter 5 & 6

3

15 Mar 2021

Share Valuation

Chapter 7

4

22 Mar 2021

Risk and Return

Chapter 11 & 12

5

29 Mar 2021

Investment Decision Rules

Chapter 8

6

05 Apr 2021

7

12 Apr 2021 19 Apr 2021

Mid-Session Exam Fundamentals of Capital Budgeting

No Lecture Chapter 9

Mid-Session Recess Cost of Capital

8

26 Apr 2021

Chapter 13

9

03 May 2021

Working Capital Management

Chapter 19

10

10 May 2021

Capital Structure

Chapter 16

11

17 May 2021

Payout Policy

Chapter 17

12

24 May 2021

Introduction to Derivatives

Chapter 20 & 21

13

31 May 2021

Revision Lecture

07 Jun 2021

Study Recess

12 Jun 2021

Examinations

19 Jun 2021

Examinations

* The above times and program may be subject to change. Students will be notified of any change via SOLS.

Lecture Recording The University of Wollongong supports the recording of lectures as a supplemental study tool, to provide students with equity of access, and as a technology-enriche...