UoS Outline FINC2012 PDF

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BUSINESS SCHOOL

Unit of Study Outline Unit Code FINC2012 Unit Title Corporate Finance II Semester 1, 2019 Pre-requisite Units: FINC2011 Co-requisite Units: Prohibited Units: Assumed Knowledge and/or Skills: Unit Coordinator: Dr Tro Kortian Address: Room 411, The Business School Building(H69), Darlington NSW 2008 Email: [email protected] Phone: 9351 6450 Consultation Hours: Please go to Canvas for details. Class Day(s): Please go to Canvas for details. Required Text / Resources: Required Textbook: Brealey R., Myers, S., Allen, F. 2017, Principles of Corporate Finance, 12th Edition, McGraw Hill.

This unit of study outline MUST be read in conjunction with The Business School Unit of Study Common Policy and implementation information that applies to every unit of study offered by the Business School (http://sydney.edu.au/business/currentstudents/policy). All assessment rules, such as standards used, penalties etc, are covered.

1. Unit of Study Information This unit builds on FINC2011 Corporate Finance I, by extending basic concepts in corporate financing, investing and risk management. The unit presents current theories of corporate financing and their practical application in corporate investment and capital budgeting. The unit also examines securities and securities markets with an emphasis on pricing, investment characteristics and their use by corporations to manage risk. The securities examined include: bonds and related fixed income products; futures and options. The goal of the unit is to broaden students' knowledge of corporate finance in preparation for further study in finance in 300 level courses.

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2. Program Learning Outcomes and Unit Learning Outcomes The Program Learning Outcomes for this Program are located at http://sydney.edu.au/business/about/accreditations/AoL Unit Learning Outcomes Unit Learning Outcomes On the successful completion of the Unit you should be able to: Identify and explain basic types of option derivative instruments, analyse the factors that affect their pricing, and demonstrate how such derivatives are applied in corporate finance. Use discounted cash flow analysis, sensitivity analysis and option pricing techniques to quantify a project's value

Demonstrate an understanding of the fundamental principles underlying corporate risk management as well as describing how risk management can be implemented utilizing derivative instruments such as options,futures,forwards and swaps.

Program Learning Outcomes 1. Depth of disciplinary expertise 2. Critical thinking and problem solving 4. Information literacy 1. Depth of disciplinary expertise 2. Critical thinking and problem solving 4. Information literacy 5. Inventiveness 1. Depth of disciplinary expertise 2. Critical thinking and problem solving 4. Information literacy

Explain and describe the fundamental elements underlying capital structure1. Depth of disciplinary expertise decisions of corporations and how such decisions impact firm value. 2. Critical thinking and problem solving 4. Information literacy 1. Depth of disciplinary expertise Identify and describe the different types of debt financing instruments available to corporations as well as being able to apply the effects of credit 2. Critical thinking and problem solving risk on the valuation of corporate debt. 4. Information literacy Explain and describe the fundamental elements underpinning payout policy 1. Depth of disciplinary expertise of corporations and how it impacts firm value. 2. Critical thinking and problem solving 4. Information literacy Explain and describe the fundamental elements linking corporate financing 1. Depth of disciplinary expertise decisions to the company cost of capital and valuation. 2. Critical thinking and problem solving 4. Information literacy 3. Assessment Assessment Title

Assessment Individual/ Assessment Type Group Conditions

Mid-Term Test

In-semester Exam (mid)

Individual

Compulsory

Assignment

Assignment

Individual

Compulsory

Final Exam

Final Exam

Individual

Compulsory

Academic Honesty

Program Learning Due Length Weight Outcomes Time Assessed 90 1, 2, 4 25% mintes 2000 1, 2, 3, 4, 5 25% 4:00pm words 1, 2, 4

3 hours 50%

Due Date

Closing Date

Mid Semester Mid Semester Exam Period Exam Period 13-May-2019

23-May-2019

Final Exam Period

Final Exam Period

Week 4

Assessment details Mid-Term Test

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Task Description The test will be 90 minutes in duration and will assess the material covered in sessions 1 - 4 inclusive of the unit of study. You will expected to demonstrate your understanding of this material by being able to answer detailed questions on these topics. The material examinable includes lectures, assigned reading and assigned questions. Details on the precise exam date, time and venue will be announced in class and via Canvas. Assessment Criteria 1. Conforming with instructions (e.g. word length, font, other instructions) 2. Use of literature/ Knowledge of theory 3. Analysis 4. Problem solving

Feedback - What, when and how feedback will be provided for this assessment i. Solutions to the mid-semester exam questions will be provided and discussed in a seperately scheduled Review Session. ii. Students will have the opportunity to look over their own individual answers to the exam. Please note that students are EXPECTED to have reviewed their exam paper prior to any informal appeal or discussion of the grade.

Assignment Task Description The major assignment examines issues and concepts pertaining to material covered in the unit of study. The precise question will be posted on CANVAS after the commencement of the semester. The written assignment report must be submitted electronically via turnitin on CANVAS. Marks for the assignment will be allocated on the basis of the coherence of the student's argument in response to the specifics of the question, the strength of the evidence that the student uses to support that argument and the extent to which the student undertakes their own analysis of raw data Assessment Criteria 1. Conforming with instructions (e.g. word length, font, other instructions) 2. Clarity of expression (incl. accuracy, spelling, grammar, punctuation) 3. Attention to purpose 4. Referencing 5. Use of literature/ Knowledge of theory 6. Methodology used is the most appropriate to the aims and objectives of the task 7. Conclusions 8. Analysis 9. Problem solving

Feedback - What, when and how feedback will be provided for this assessment The major assignment will be marked electronically on CANVAS. Students will be able to review individual comments for their work once the marking is complete. Assignments marks and feedback wlill be available to students within three weeks of the submission date. Students are EXPECTED to have reviewed the comments given on their assignment prior to any informal appeal or discussion of the grade.

Final Exam Task Description The final exam will give you the opportunity to demonstrate your understanding of the material covered in the

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unit of study through a set of problem solving and conceptual questions. All topics of the course are potentially examinable in the final exam. The Final Exam will be a 3 hour closed book examination.. Further details of the sturcture of the Final Exam will be provided during the last session. Assessment Criteria 1. Conforming with instructions (e.g. word length, font, other instructions) 2. Use of literature/ Knowledge of theory 3. Conclusions 4. Analysis 5. Problem solving 6. Critical reasoning / critical thinking

Feedback - What, when and how feedback will be provided for this assessment Students will be given the opportunity to review their final exam on the Discipline of Finance review days. Details of the day/time and the registration process will be provided on CANVAS at the end of the semester.

4. Other Resources for Students All lectures and seminars are recorded and will be available within the LMS for student use. Please note the Business School does not own the system and cannot guarantee that the system will operate or that every class will be recorded. Students should ensure they attend and participate in all classes. PASS Peer-Assisted Study Sessions (PASS) is a peer-facilitated, cooperative student support scheme aiming to improve students' academic performance by providing extra, free learning opportunities with trained student facilitators. Each session includes problem solving practice in areas directly related to understanding the unit concepts more thoroughly. PASS features small class sizes and a friendly personal approach to help you reinforce key course requirements in a collaborative, active and social learning environment. Registrations open in the first week of semester. For more information or to register, please visit: https://sydney.edu.au/students/peer-assisted-study-sessions.html Email all enquiries about the PASS program to: [email protected] Maths in Business The Business School provides a free series of workshops with student facilitators open to all students interested in mastering both basic and upper intermediate level mathematics. The program includes workshops from basic to intermediate level maths and Excel, both of which are fundamental skills for any aspiring business student.The Maths in Business program helps ensure high achievement throughout your business degree. Most foundational units of study require a firm understanding of maths, and this is essential to senior units in accounting, business analytics and finance. Registrations open in the first week of semester. For more information or to register, please visit: https://sydney.edu.au/students/maths-in-business.html Email all enquiries about the Maths in Business program to: [email protected] Readings Unit readings are available on the LMS

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5. Unit Schedule Week

List of Topics

Assessments Due

1 Introduction & Course Overview 25 Feb 2019 Options – I 2 4 Mar 2019

Options - I cont. Options – II

3 Options - II cont. 11 Mar 2019 4 Further Aspects of Capital Budgeting: Project Analysis 18 Mar 2019 5 Real Options 25 Mar 2019 6 1 Apr 2019

Managing Risk

7 8 Apr 2019

An Overview of Corporate Financing

8 Capital Structure – I 15 Apr 2019 9 COMMON WEEK: No Classes 19 April to 26 April 2019 22 Apr 2019 10 Capital Structure – II 29 Apr 2019 11 6 May 2019

Credit Risk and the Value of Corporate Debt

12 Dividend Policy 13 May 2019 13 Financing and Valuation 20 May 2019

Assignment Due: Monday 13 May 2019 4:00pm

14 Review 27 May 2019

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