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Unit of study_

FINC6001: Intermediate Corporate Finance

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

This unit extends some of the fundamental concepts introduced in FINC5001 Capital Markets and Corporate Finance, and develops a rigorous framework for the analysis and understanding of key aspects of corporate financial decision making. Fundamental concepts in corporate finance are extended to more complex settings. The unit examines more advanced approaches to asset pricing and capital budgeting. New topics are covered in relation to derivative securities and real options applications in capital budgeting. The issues of the cost of capital, corporate capital structure, and corporate dividend policy, are extended to cover the interaction of corporate and personal taxation, agency problems, and information signalling.

Unit details and rules

Unit code FINC6001
Academic unit Finance
Credit points 6
Prohibitions
? 
None
Prerequisites
? 
FINC5001
Corequisites
? 
None
Assumed knowledge
? 

None

Available to study abroad and exchange students

Yes

Teaching staff

Coordinator Tro Kortian, tro.kortian@sydney.edu.au
Type Description Weight Due Length
Final exam hurdle task Final exam
Written exam
40% Formal exam period 2 hours
Outcomes assessed: LO1 LO7 LO6 LO5 LO4 LO3 LO2
In-semester test Mid-semester exam (online)
MCQ
30% Mid-semester exam period 1 hour
Outcomes assessed: LO1 LO7 LO6 LO5 LO4 LO3 LO2
Assignment Major assignment
Spreadsheet-based problems and questions
30% Week 11
Due date: 22 May 2020 at 16:00
n/a
Outcomes assessed: LO1 LO7 LO6 LO5 LO4 LO3 LO2
hurdle task = hurdle task ?

Assessment summary

  • Mid-semester exam (online): The test will examine your familiarity and comprehension of the key issues and analytical concepts covered in weeks 1 to 4 inclusive. The examinable material includes lectures, assigned readings, assigned questions and pre-requisite knowledge. This material will be examined again in the final exam. The mid-semester exam will be an online multiple choice format test.
  • Major assignment: This individual assignment provides an opportunity for students to demonstrate their understanding of the key concepts and material covered in the course. Based on theories taught in the unit, the major assignment requires you to complete a series of online spreadsheet-based problems and questions.
  • Final exam: The final exam will give you the opportunity to demonstrate your understanding of the material covered in the entire unit of study. All topics are potentially examinable in the final exam. The final exam is listed as a HURDLE TASK which means you must complete the assessment and in order to pass the unit. Students who fail to complete this assessment, even when their aggregate mark for the entire unit of study is above 50%, will be given a Fail grade for this unit. As a result, a student's academic transcript will show a Fail grade and the actual mark achieved if the final mark of the unit is between 0-49 and a Fail grade and a capped moderated mark of 49 for all other final marks.

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.

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 1. Introduction and unit overview; 2. Fundamentals of capital budgeting; 3. Financial decision making and the law of one price Lecture (3 hr)  
Week 02 Estimating the cost of capital Lecture (3 hr)  
Week 03 Financial options Lecture (3 hr)  
Week 04 Option valuation Lecture (3 hr)  
Week 05 Real options Lecture (3 hr)  
Week 06 1. Capital structure in a perfect market; 2. Debt and taxes Lecture (3 hr)  
Week 07 Financial distress, managerial incentives, and information Lecture (3 hr)  
Week 08 Capital budgeting with valuation and leverage Lecture (3 hr)  
Week 09 Payout policy Lecture (3 hr)  
Week 10 Raising equity capital Lecture (3 hr)  
Week 11 Debt financing Lecture (3 hr)  
Week 12 1. Short-term financial planning; 2. Working capital management Lecture (3 hr)  
Week 13 1. Corporate governance; 2. Exam information Lecture (3 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

  • Corporate Finance (5th Global Edition) Berk and  DeMarzo. Pearson 2020.

An e-book version of the text and the online resource MyFinaceLab will be made available to all students. Access to these resources are free. Once you are enrolled in FINC6001 you should be able to click through from the FINC6001 Canvas Site to MyFinaceLab and the e-book. 

 

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 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. describe the financing methods available to a corporation
  • LO4. evaluate the current approaches to determining capital structure
  • LO5. analyse the factors that influence the payout decision
  • LO6. explain the impact of financing on project analysis
  • LO7. explain the nature of agency costs in the corporation and the problems of performance measurement.

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.