25300 Fundamentals of Business Finance
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Subject handbook information prior to 2015 is available in the Archives.
Credit points: 6 cp
Subject level:
Undergraduate
Result type: Grade and marksRequisite(s): 26100c Integrating Business Perspectives
The lower case 'c' after the subject code indicates that the subject is a corequisite. See definitions for details.
These requisites may not apply to students in certain courses.
There are course requisites for this subject. See access conditions.
Description
The subject develops an understanding of the core principles of finance and their applications to financial decision-making. Topics include an overview of the financial markets, time value of money, valuation of securities, risk-and-return, capital budgeting decisions and financing decisions.
Subject objectives
| 1. | discuss the types of financial decisions and the role of the financial manager |
|---|---|
| 2. | examine financial instruments and their valuation |
| 3. | explain the importance of the time value of money, risk and return and cash flow when making informed business decisions |
| 4. | evaluate the concept of optimal capital structure and the factors influencing its determination. |
This subject also contributes specifically to the following program learning objectives:
- Apply technical skills necessary for professional practice in business (5.2)
Contribution to the development of graduate attributes
The subject contributes to the Bachelor of Business by providing students with an introduction to finance. It exposes students to the issues and methodology for optimally allocating scarce financial and non-financial resources amongst competing alternatives. It introduces the appropriate tools and techniques to make informed financial decisions. This subject will develop skills linked to the Faculty’s graduate attribute that looks at developing business orientated skills.
Teaching and learning strategies
The teaching strategies and learning materials for Fundamentals of Business Finance have been developed for a culturally diverse student body. They incorporate a range of strategies to provide students with flexible learning approaches. These strategies include face-to-face instruction, tutorial discussion, and self-managed learning materials in print and electronic forms. Students will use UTS web-based facility to access relevant information and to interact with staff and peers.
Content
• Introduction to finance and objectives of the firm;
• Time value of money;
• Valuation of debt and equity securities;
• Risk-and-return relationship;
• Capital budgeting decisions: evaluation methods, cash flow analysis, incremental cash flows, issues in investment evaluation;
• Financing decisions: sources of finances, financing mix, cost of capital, issues in capital structure choices;
Assessment
Assessment task 1: In-class quizzes (Individual)
| Objective(s): | This addresses subject learning objective(s): 1, 2 and 3 |
|---|---|
| Weight: | 20% |
| Length: | 30 minutes |
Assessment task 2: Case Study (Group)
| Objective(s): | This addresses subject learning objective(s): 1 and 3 |
|---|---|
| Weight: | 20% |
Assessment task 3: Final Exam (Individual)
| Objective(s): | This addresses subject learning objective(s): 1, 2, 3 and 4 This addresses program learning objectives(s): 5.2 |
|---|---|
| Weight: | 60% |
Minimum requirements
Students must achieve at least 50% of the subject’s total marks.
Required texts
Essentials of Corporate Finance by Ross, Trayler, Bird, Westerfield, Jordan, 3rd Edition, McGraw-Hill, 2014 (referred to as Ross).
Fundamentals of Business Law by Barron, 7th edition, McGraw-Hill.
The lecture notes and Homework questions are available on UTSOnline.
References
Gitman LJ, Juchau R, Flanagan J, Principles of Managerial Finance, 6th Edition, Pearson/Addison Wesley, 2010.
Ross SA, Bianchi R, Drew M, Christensen MJ, Westerfield RW, and Jordan BD, Fundamentals of Corporate Finance, 6th Australian Edition, McGraw Hill, 2014.
