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Unit outline_

FINC2011: Corporate Finance I

Semester 1, 2020 [Normal day] - Camperdown/Darlington, Sydney

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.

Unit details and rules

Academic unit Finance
Credit points 6
Prerequisites
? 
{(BUSS1020 or ECMT1010 or ENVX1001 or ENVX1002 or DATA10010) or [(MATH1005 or MATH1015) and MATH1115)] or 6 credit points in MATH units including MATH1905)} and (BUSS1040 or ECON1001 or ECON1002)
Corequisites
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None
Prohibitions
? 
None
Assumed knowledge
? 

BUSS1030

Available to study abroad and exchange students

Yes

Teaching staff

Coordinator Evelyn Lai, evelyn.lai@sydney.edu.au
Type Description Weight Due Length
Final exam Final exam
n/a
50% Formal exam period 2 hours
Outcomes assessed: LO1 LO7 LO6 LO5 LO4 LO3 LO2
In-semester test Mid-semester exam
n/a
20% Mid-semester exam period 1 hour
Outcomes assessed: LO1 LO7 LO6 LO5 LO4 LO3 LO2
Assignment Major assignment
n/a
30% Week 12 12 pages
Outcomes assessed: LO1 LO7 LO6 LO5 LO4 LO3 LO2

Assessment summary

  • Mid-semester exam: The mid-semester exam will assess the materials covered in topics 1-5 of this unit. You will be expected to demonstrate your understanding of this material by being able to answer detailed questions on these topics.
  • Major assignment: 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 unit to resolve a problem. Marks for the assignment will be allocated based on 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 their argument and overall discussion.
  • Final exam: The final exam will assess all the material covered in this unit.

Replacement Exams: The Business School has determined that second replacement exams (both Mid-Semester and Final) will not be offered for this Unit of Study should a student submit two special considerations for the same exam as this unit forms part of the professional accounting accreditation pathway. Should a student be granted a replacement exam via special consideration, and is then unable to attend or does not complete the replacement exam, any subsequent special consideration will result in a DC grade (Discontinue Without Fail).

Detailed information for each assessment can be further found on Canvas.

Assessment criteria

The University awards common result grades, set out in the Coursework Policy 2014 (Schedule 1).

As a general guide, a high distinction indicates work of an exceptional standard, a distinction a very high standard, a credit a good standard, and a pass an acceptable standard.

Result name

Mark range

Description

High distinction

85 - 100

Awarded when you demonstrate the learning outcomes for the unit at an exceptional standard, as defined by grade descriptors or exemplars outlined by your faculty or school. 

Distinction

75 - 84

Awarded when you demonstrate the learning outcomes for the unit at a very high standard, as defined by grade descriptors or exemplars outlined by your faculty or school.

Credit

65 - 74

Awarded when you demonstrate the learning outcomes for the unit at a good standard, as defined by grade descriptors or exemplars outlined by your faculty or school.

Pass

50 - 64

Awarded when you demonstrate the learning outcomes for the unit at an acceptable standard, as defined by grade descriptors or exemplars outlined by your faculty or school. 

Fail

0 - 49

When you don’t meet the learning outcomes of the unit to a satisfactory standard.

For more information see guide to grades.

Late submission

In accordance with University policy, these penalties apply when written work is submitted after 11:59pm on the due date:

  • Deduction of 5% of the maximum mark for each calendar day after the due date.
  • After ten calendar days late, a mark of zero will be awarded.

Academic integrity

The Current Student website provides information on academic integrity and the resources available to all students. The University expects students and staff to act ethically and honestly and will treat all allegations of academic integrity breaches seriously.

We use similarity detection software to detect potential instances of plagiarism or other forms of academic integrity breach. If such matches indicate evidence of plagiarism or other forms of academic integrity breaches, your teacher is required to report your work for further investigation.

Use of generative artificial intelligence (AI) and automated writing tools

You may only use generative AI and automated writing tools in assessment tasks if you are permitted to by your unit coordinator. If you do use these tools, you must acknowledge this in your work, either in a footnote or an acknowledgement section. The assessment instructions or unit outline will give guidance of the types of tools that are permitted and how the tools should be used.

Your final submitted work must be your own, original work. You must acknowledge any use of generative AI tools that have been used in the assessment, and any material that forms part of your submission must be appropriately referenced. For guidance on how to acknowledge the use of AI, please refer to the AI in Education Canvas site.

The unapproved use of these tools or unacknowledged use will be considered a breach of the Academic Integrity Policy and penalties may apply.

Studiosity is permitted unless otherwise indicated by the unit coordinator. The use of this service must be acknowledged in your submission as detailed on the Learning Hub’s Canvas page.

Outside assessment tasks, generative AI tools may be used to support your learning. The AI in Education Canvas site contains a number of productive ways that students are using AI to improve their learning.

Simple extensions

If you encounter a problem submitting your work on time, you may be able to apply for an extension of five calendar days through a simple extension.  The application process will be different depending on the type of assessment and extensions cannot be granted for some assessment types like exams.

Special consideration

If exceptional circumstances mean you can’t complete an assessment, you need consideration for a longer period of time, or if you have essential commitments which impact your performance in an assessment, you may be eligible for special consideration or special arrangements.

Special consideration applications will not be affected by a simple extension application.

Using AI responsibly

Co-created with students, AI in Education includes lots of helpful examples of how students use generative AI tools to support their learning. It explains how generative AI works, the different tools available and how to use them responsibly and productively.

WK Topic Learning activity Learning outcomes
Week 01 Introduction to finance and financial markets Lecture and tutorial (3 hr) LO1 LO2
Week 02 Financial mathematics 1 Lecture and tutorial (3 hr) LO3
Week 03 Financial mathematics 2 Lecture and tutorial (3 hr) LO3
Week 04 Valuation of debt and equity Lecture and tutorial (3 hr) LO2 LO3
Week 05 Risk and return Lecture and tutorial (3 hr) LO5
Week 06 Capital asset pricing model (CAPM) Lecture and tutorial (3 hr) LO5 LO6
Week 07 Study week Lecture and tutorial (3 hr)  
Week 08 Company cost of capital Lecture and tutorial (3 hr) LO5 LO6
Week 09 Equity capital markets Lecture and tutorial (3 hr) LO2
Week 10 Asset market efficiency and behavioural finance Lecture and tutorial (3 hr) LO7
Week 11 Capital budgeting 1 Lecture and tutorial (3 hr) LO4
Week 12 Capital budgeting 2 Lecture and tutorial (3 hr) LO4
Week 13 Business ethics and exam review Lecture and tutorial (3 hr) LO1

Attendance and class requirements

Lecture recordings: All lectures and seminars are recorded and will be available on Canvas 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.

Study commitment

Typically, there is a minimum expectation of 1.5-2 hours of student effort per week per credit point for units of study offered over a full semester. For a 6 credit point unit, this equates to roughly 120-150 hours of student effort in total.

Required readings

Brealey, R. A., Myers, S. C., and Allen, F. (2020); Principles of Corporate Finance (13th ed.); McGraw Hill Irwin.

Learning outcomes are what students know, understand and are able to do on completion of a unit of study. They are aligned with the University's graduate qualities and are assessed as part of the curriculum.

At the completion of this unit, you should be able to:

  • LO1. identify and explain the basic types of financial management decisions undertaken within a corporation and the role of corporate financial manager
  • LO2. 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
  • LO3. explain and apply the basic concepts underpinning the valuation of bonds and common equity securities
  • LO4. 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
  • LO5. explain and apply the concepts of expected return, security risk, diversification, portfolio risk, ‘beta’ and the role they play underpinning asset pricing models such as the CAPM
  • LO6. calculate company beta, company and divisional cost of capital, and project cost of capital
  • LO7. discuss and explain the concept of market efficiency as well as identify instances of weak, semi-strong and strong forms of financial market efficiency.

Graduate qualities

The graduate qualities are the qualities and skills that all University of Sydney graduates must demonstrate on successful completion of an award course. As a future Sydney graduate, the set of qualities have been designed to equip you for the contemporary world.

GQ1 Depth of disciplinary expertise

Deep disciplinary expertise is the ability to integrate and rigorously apply knowledge, understanding and skills of a recognised discipline defined by scholarly activity, as well as familiarity with evolving practice of the discipline.

GQ2 Critical thinking and problem solving

Critical thinking and problem solving are the questioning of ideas, evidence and assumptions in order to propose and evaluate hypotheses or alternative arguments before formulating a conclusion or a solution to an identified problem.

GQ3 Oral and written communication

Effective communication, in both oral and written form, is the clear exchange of meaning in a manner that is appropriate to audience and context.

GQ4 Information and digital literacy

Information and digital literacy is the ability to locate, interpret, evaluate, manage, adapt, integrate, create and convey information using appropriate resources, tools and strategies.

GQ5 Inventiveness

Generating novel ideas and solutions.

GQ6 Cultural competence

Cultural Competence is the ability to actively, ethically, respectfully, and successfully engage across and between cultures. In the Australian context, this includes and celebrates Aboriginal and Torres Strait Islander cultures, knowledge systems, and a mature understanding of contemporary issues.

GQ7 Interdisciplinary effectiveness

Interdisciplinary effectiveness is the integration and synthesis of multiple viewpoints and practices, working effectively across disciplinary boundaries.

GQ8 Integrated professional, ethical, and personal identity

An integrated professional, ethical and personal identity is understanding the interaction between one’s personal and professional selves in an ethical context.

GQ9 Influence

Engaging others in a process, idea or vision.

Outcome map

Learning outcomes Graduate qualities
GQ1 GQ2 GQ3 GQ4 GQ5 GQ6 GQ7 GQ8 GQ9

This section outlines changes made to this unit following staff and student reviews.

No changes have been made since this unit was last offered.

Disclaimer

The University reserves the right to amend units of study or no longer offer certain units, including where there are low enrolment numbers.

To help you understand common terms that we use at the University, we offer an online glossary.