FINC2012: Semester 2, 2020

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Units FINC2012 Semester 2 2020 [Normal day]

Unit of study_

FINC2012: Corporate Finance II

Semester 2, 2020 [Normal day] - Camperdown/Darlington, Sydney

Overview

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.

Unit details and rules

Unit code	FINC2012
Academic unit	Finance
Credit points	6
Prohibitions ?	None
Prerequisites ?	FINC2011
Corequisites ?	None
Assumed knowledge ?	None
Available to study abroad and exchange students	Yes

Teaching staff

Coordinator	Henry Leung, henry.leung@sydney.edu.au
Lecturer(s)	Henry Leung, henry.leung@sydney.edu.au

Type	Description	Weight	Due	Length
Final exam (Record+)	Final exam Written exam	50%	Formal exam period	2 hours
Outcomes assessed:
In-semester test (Open book)	In-semester Exam See Canvas for details.	25%	Week 07 Due date: 15 Oct 2020 at 17:00	50 minutes
Outcomes assessed:
Assignment	Assignment See Canvas for details.	25%	Week 10 Due date: 02 Nov 2020 at 14:00 Closing date: 12 Nov 2020	2000 words
Outcomes assessed:
= Type B final exam ? = Type C in-semester exam ?

Assessment summary

Final exam: The objective of the final exam is to test your understanding of the material studied and covers the entire unit. Questions will typically involve short essay, or discussion questions, and problem-solving questions. Part of the exam will be modelled on tutorial questions and therefore you would be well advised to put significant effort into doing the assigned work. Aspects of the assignment may also be examined.

Detailed information for each assessment can be 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 sydney.edu.au/students/guide-to-grades.

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.

You may only use artificial intelligence and writing assistance tools in assessment tasks if you are permitted to by your unit coordinator, and if you do use them, you must also acknowledge this in your work, either in a footnote or an acknowledgement section.

Studiosity is permitted for postgraduate units unless otherwise indicated by the unit coordinator. The use of this service must be acknowledged in your submission.

Learning support

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.

Weekly schedule

WK	Topic	Learning activity
Week 01	1. Introduction and unit overview; 2. Revision of using the NPV rule	Lecture (2 hr)
Week 02	Revision of using the NPV rule	Tutorial (1 hr)
Week 02	1. Risk and the cost of capital; 2. Dealing with risk in capital budgeting certainty equivalents	Lecture (2 hr)
Week 03	1. Risk and the cost of capital; 2. Dealing with risk in capital budgeting certainty equivalents	Tutorial (1 hr)
Week 03	1. Capital budgeting: project analysis; 2. Evaluating Projects; 3. Tools for uncertainty	Lecture (2 hr)
Week 04	1. Capital budgeting: project analysis; 2. Evaluating Projects; 3. Tools for uncertainty	Tutorial (1 hr)
Week 04	Options and corporate finance	Lecture (2 hr)
Week 05	Options and corporate finance	Tutorial (1 hr)
Week 05	Real options	Lecture (2 hr)
Week 06	Real options	Tutorial (1 hr)
Week 06	Agency problems, performance measurement and signalling	Lecture (2 hr)
Week 07	Agency problems, performance measurement and signalling	Tutorial (1 hr)
Week 07	In-lecture mid-semester exam	Lecture (2 hr)
Week 08	Tutorial on assignment preparation	Tutorial (1 hr)
Week 08	1. Capital structure theory; 2. Debt and value in perfect markets	Lecture (2 hr)
Week 09	1. Capital structure theory; 2. Debt and value in perfect markets	Tutorial (1 hr)
Week 09	Debt and value in imperfect markets	Lecture (2 hr)
Week 10	Debt and value in imperfect markets	Tutorial (1 hr)
Week 10	Investment and financing interaction	Lecture (2 hr)
Week 11	Investment and financing interaction	Tutorial (1 hr)
Week 11	1. Dividend policy; 2. Dividends and value	Lecture (2 hr)
Week 12	1. Dividend policy; 2. Dividends and value	Tutorial (1 hr)
Week 12	Review	Lecture (2 hr)

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

All readings for this unit can be accessed through the Library eReserve, available on Canvas.

Brealey R., Myers, S., and Allen, F. 2017, Principles of Corporate Finance, 12th Edition, McGraw Hill.

Learning outcomes

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.

Outcomes
Graduate qualities

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

LO1. identify the sources of value embedded in a project
LO2. use discounted cash flow analysis, sensitivity analysis and option pricing techniques to quantify a project's value
LO3. explain the nature of agency costs in the corporation and the problems of performance measurement
LO4. describe the financing methods available to a corporation
LO5. evaluate the current approaches to determining capital structure
LO6. analyse the factors that influence the payout decision
LO7. explain the impact of financing on project analysis.

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
Learning outcomes

Responding to student feedback

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

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

Additional information

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.

Current students

Overview

Overview

Unit details and rules

Teaching staff

Assessment

Assessment

Assessment summary

Assessment criteria

Late submission

Academic integrity

Learning support

Learning support

Simple extensions

Special consideration

Using AI responsibly

Weekly schedule

Weekly schedule

Attendance and class requirements

Study commitment

Required readings

Learning outcomes

Learning outcomes

Graduate qualities

Outcome map

Responding to student feedback

Responding to student feedback

Additional information

Additional information

Disclaimer

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