BUSINESS SCHOOL

Unit of Study Outline

Unit Code FINC2011
Unit Title Corporate Finance I
Semester 2, 2014
Pre-requisite Units:
Co-requisite Units:
Prohibited Units: FINC2001
Assumed Knowledge and/or Skills: (ECMT1010 or BUSS1020) and BUSS1040 or (ECON1001 and ECON1002)
Unit Coordinator: Tro Kortian
Address: Room 411, The Business School Building(H69), Darlington NSW 2008
Email: tro.kortian@sydney.edu.au Phone: 93516450
Consultation Hours: Please go to Blackboard for details of all staff consultation times.
Class Day(s): Please go to Blackboard for class times and locations
Required Text / Resources:
Brealey R, S Myers, and F Allen, Principles of Corporate Finance, 11th Edition, McGraw Hill, 2014
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.
The Business School Student Administration Manual - for information about all processes such as illness, appeals etc (
http://sydney.edu.au/business/currentstudents/student_information/student_administration_manual) When deciding applications and
appeals relating to these matters it will be assumed that every student has taken the time to familiarise themselves with these key policies
and procedures.
The Business School seeks feedback from students and staff in order to continually improve all units offered. For information on previously
collected feedback and innovations made in response to this feedback, please see
http://sydney.edu.au/business/learning/planning_and_quality/feedback/student

1. Unit of Study Information

This unit provides an introduction to basic concepts in corporate finance and their application to (1) valuation of
risky assets including stocks, bonds and entire corporations, (2) pricing of equity securities, and (3) corporate
financial policy decisions including dividend, capital structure and risk management policies. Emphasis is placed
on the application of the material studied and current practices in each of the topic areas.

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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/learning/staff/leadership/program_directors/outcomes
Unit Learning Outcomes
Unit Learning Outcomes
On the successful completion of the Unit you should be able to:
Identify and explain the basic types of financial management decisions
undertaken within a
corporation and the role of corporate financial manager.
Describe and discuss the key elements of a modern financial system,
including identification and
discussion of the main categories of financial institutions, types of financial
instruments, and functions of different financial markets
Explain and apply the basic concepts underpinning the valuation of bonds
and common equity securities.

Explain and apply the Net Present Value (NPV) rule for corporate capital
budgeting in realistic settings, as well as appraise the merits of other
alternative investment criteria.
Explain and apply the concepts of expected return, security risk,
diversification, portfolio risk, beta, the role they play underpinning asset
pricing models such as the CAPM .
Calculate company beta, company and divisional cost of capital, and
project cost of capital.

Discuss and explain the concept of market efficiency as well as identify

instances of weak,
semi-strong and strong forms of financial market efficiency.

Program Learning Outcomes

1. Business Knowledge
4. Communication
1. Business Knowledge
2. Critical Thinking
3. Business Analysis and
Problem-Solving
1. Business Knowledge
2. Critical Thinking
3. Business Analysis and
Problem-Solving
1. Business Knowledge
2. Critical Thinking
3. Business Analysis and
Problem-Solving
1. Business Knowledge
2. Critical Thinking
3. Business Analysis and
Problem-Solving
1. Business Knowledge
2. Critical Thinking
3. Business Analysis and
Problem-Solving
1. Business Knowledge
2. Critical Thinking
3. Business Analysis and
Problem-Solving

3. Assessment

Assessment Name
Mid-semester Test
Tutorial Participation
Major Assignment
Final Examination
Academic Honesty

Individual/ Assessment
Group
Conditions
Individual
Individual
Individual
Individual

Compulsory
Compulsory
Compulsory
Compulsory

Program
Learning
Outcomes
Assessed
1, 2, 3
1, 2, 3
1, 2, 3, 4
1, 2, 3

Length

Weight Due Date

Closing Date

1 hour
N/A
12 pages
3 hours

25%
10%
20%
45%

02-Sep-2014
N/A
29-Oct-2014
N/A

02-Sep-2014
N/A
22-Oct-2014
N/A
Week 4

For the meaning and operation of this table, see policy information in the box on the front page or click here

Assessment details
Mid-semester Test

Task Description
This is a combined multiple-choice and short answer exam assessing the material covered in sessions 1 - 4 of
the unit of study. You will expected to demonstrate your understanding of this material by being able to

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answer detailed questions on these topics. The exam will run during the lecture time. You will be advised on
blackboard of the time you have been allocated to sit the exam.

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
5. Critical reasoning / critical thinking

Feedback - What, when and how feedback will be provided for this assessment
Students will be able to receive feedback on the mid-semester exam via the following two avenues:
i. Solutions to the exam questions will be provided and discussed in tutorials.
ii. Students will have the opportunity to look over and discuss their individual answers to exam.

Tutorial Participation

Task Description
Tutorials are intended as active collaborative learning experiences where your informed input will be both
expected and supported. Tutors will emphasise as well as demonstrate that marks that are awarded will be for
more than mere attendance of tutorials. The tutorial will be an opportunity for you to develop skills and
understand the relevance of the concepts introduced each week in lectures. Assigned work will be randomly
collected four times over the semester by your tutor to gauge your level of understanding as well as in
determination of your overall participation mark.
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
5. Critical reasoning / critical thinking
6. Presentation / communication (oral)

Feedback - What, when and how feedback will be provided for this assessment
Students will be given feedback in accordance with their assessed preparation and contribution/involvement in
the tutorial discussion.

Major Assignment

Task Description
The major assignment will give you an opportunity to demonstrate your understanding of the material covered
in the course to date. You will be required to identify and collect data relevant to the question and then utilise
analysis techniques covered in the course to resolve a problem. Emphasis is placed on your ability to justify
the choices you have made in this process and to be able to understand the limitations of the outcomes you
produce.
Assessment Criteria

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1.
2.
3.
4.
5.
6.
7.
8.

Conforming with instructions (e.g. word length, font, other instructions)

Presentation, communication & style (written)
Clarity of expression (incl. accuracy, spelling, grammar, punctuation)
Referencing
Use of literature/ Knowledge of theory
Conclusions
Analysis
Problem solving

Feedback - What, when and how feedback will be provided for this assessment
Assignments will be marked online and students will be able to see individual comments via turnitin.
Assignment marks and individual feedback will be available to students within three weeks of the assignment
due date.

Final Examination

Task Description
The final exam will give you the opportunity to demonstrate your understanding of the material covered in the
unit of study through a set of problem solving and conceptual questions. All topics of the course are potentially
examinable in the final exam.
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 blackboard at the end of the semester.

4. Other Resources for Students

All lectures and seminars are recorded and will be available within Blackboard 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 Program
Peer Assisted Study Sessions. This program helps to improve students' academic performance providing extra
free learning opportunities with trained student facilitators, including problem solving practice where relevant, in
areas directly related to understanding the unit concepts more thoroughly. Students register for PASS online at:
http://sydney.edu.au/business/learning/students/pass Email all enquiries about the PASS program to:
business.pass@sydney.edu.au

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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 higher intermediate level mathematics. Workshops will be structured to strengthen
your knowledge of algebra before proceeding to calculus, probability and then progressing to refine your skills
in Excel. Students register for workshops online at:
http://sydney.edu.au/business/learning/students/maths/workshops2 Email all enquiries about the Maths in
Business program to: business.maths@sydney.edu.au

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5. Unit Schedule
Week
1
28 Jul
2014
2
4 Aug
2014
3
11 Aug
2014
4
18 Aug
2014
5
25 Aug
2014
6
1 Sep
2014
7
8 Sep
2014
8
15 Sep
2014
9
22 Sep
2014

Required Reading(s)

Lecture/Tutorial

BMA Chapter 1

Course overview an
Introduction to Corporate
Finance

http://opac.library.usyd.edu.au/record=b3936012

A Modern Financial System

BMA Chapter 2

Financial Mathematics

BMA Chapter 3 (sections 3.1, 3.2, 3.5 & 3.6)

Valuation of Bonds.

BMA Chapter 4

Valuation of Stocks

Mid-Semester Exam

Mid-Semester Exam

BMA Chapter 5

Capital Budgeting - I

BMA Chapter 6

Capital Budgeting - II

BMA Chapter 7

Risk and Return

Assessments
Due

Mid-Semester
Exam

Common week 29 Sep to 5 Oct

10
6 Oct
2014
11
13 Oct
2014

BMA Chapter 8

Portfolio Theory and Capital

Asset Pricing Model

BMA Chapter 9

Risk and the Cost of Capital

12
20 Oct
2014

BMA Chapter 13

Market Efficiency and

Behavioural Finance

13
27 Oct
2014

None

Business Ethics & Review

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Major
Assignment Due:
Wednesday 22
October 4pm