Faculty of Business: Finance and Economics
Credit points: 6 cp

Subject level: Undergraduate

Result Type: Grade and marks

Requisite(s): 25557 Corporate Finance: Theory and Practice
These requisites may not apply to students in certain courses.
There are also course requisites for this subject. See access conditions.

Handbook description

This subject explores the advanced topics in corporate finance such as the impact of differing taxation regimes, analysis of agency conflicts, use of alternative project evaluation methods and the use of options in valuation and project evaluation.

Subject objectives/outcomes

On successful completion of this subject students should be able to:

1. Appreciate the effects of taxation on corporate financing and investment decisions
2. Understand the implications of option pricing theory and agency theory for corporate financial policy
3. Understand the issues for valuation and financing of new and existing businesses
4. Evaluate alternative strategies for corporate restructuring.

Contribution to graduate profile

This subject builds on the foundation knowledge in finance and introduces students to advanced topics in corporate finance. It provides an overview of contemporary theories and examines their implications for corporate finance policy. Empirical evidence are analysed to gain an appreciation of issues in corporate finance decisions.

Teaching and learning strategies

The course will be taught using a combination of lectures and workshops. Both printed and electronic learning materials are available. Lecture materials are reinforced through discussion of tutorial questions.

Content

• Taxation, tax regimes and implications for financial decisions.
• Investment appraisals and option pricing theory
• Agency theory, stakeholders and financial choices
• Innovations in financing techniques
• Valuation and financing of new business
• Mergers and acquisitions
• Corporate restructuring.

Assessment

Assignment (Group)	20%
The assignment will assess students' understanding of the issues involved in corporate financing decisions. The assignment will give students an opportunity to relate theory to practice. It will allow students to demonstrate that they have met objectives 1-3.
Mid-Semester Examination (Individual)	25%
The mid semester examination will test students understanding of the critical issues relating to financing choices. It assures objectives 1-3.
Final Examination (Individual)	55%
The final examination will test students understanding of the theory and their ability to apply the theory to corporate decisions. Students will be required to demonstrate proficiency in evaluating corporate restructuring alternatives. This assures objectives 1-4.

Examinations will be conducted under University examination conditions, and hence thoroughly address concerns regarding secure assessment. The case study will be secured through a combination of updating of assessment tasks across semesters and/or plagiarism detection software.

Recommended text(s)

Brealey, R. and Myers, S. (2003) Principles of Corporate Finance, 7th ed. McGraw-Hill, New York.

Indicative references

Brealey, R., Myers, S., Partington. G. and Robinson, D. (2000) Principles of Corporate Finance, McGraw-Hill, Australia.

Smith, J. and Kiholm-Smith, R. (2003) Enterpreneurial Finance, 2nd ed. John Wiley and Sons, New York.