25300 Fundamentals of Business Finance
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Subject handbook information prior to 2020 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 technical and theoretical core concepts of finance and their applications to financial decision-making in the business environment which is required for professional practice. Topics include an overview of financial markets, time value of money, valuation of securities, risk and return, capital budgeting decisions and financing decisions.
Subject learning objectives (SLOs)
| 1. | describe the types of financial decisions and the role of the financial manager |
|---|---|
| 2. | apply the concepts of time value of money and risk and return to financial decision making |
| 3. | describe and determine the value of financial instruments |
| 4. | analyse capital budgeting projects |
| 5. | evaluate capital structure and the factors influencing the optimal capital structure policy |
Contribution to the development of graduate attributes
The subject contributes to the Bachelor of Business by providing students with an introduction to the core technical and theoretical concepts of finance. It exposes students to the practical issues around optimally allocating scarce financial and non-financial resources amongst competing alternatives. It introduces the appropriate tools, techniques and skills to make informed financial decisions. This subject will develop technical skills relevant to making investment and financing decisions, for example, whether a business should invest in a new project or issue additional equity. These technical skills are linked to the Faculty’s graduate attribute that looks at developing business orientated skills. Students will apply technical skills during tutorial classes, online quizzes, group case study and final exam.
This subject contributes to the development of the following graduate attributes:
- Business knowledge and concepts
- Business practice oriented skills
This subject specifically introduces the following program learning objectives:
- 1.1. Critically analyse relevant concepts to understand practice in business and related professions in a global workplace
- 5.1. Apply technical and professional skills necessary to operate effectively in business and related professions
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 blended learning strategies which require students developing their knowledge of course content from lecture slides and textbook readings, and homework and online multiple choice questions prior to attending class. This knowledge developed through readings and preparation of homework questions enables active learning for students when they attend classes through face-to-face instruction, and group collaboration and class discussion between students when completing homework and unseen in-class question sets in tutorial classes. Students will use UTSOnline to access relevant information and for online collaboration with staff and peers using the discussion board forum.
Content (topics)
• Introduction to finance and objectives of the firm;
• Time value of money;
• Valuation of debt and equity securities;
• The 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: Online quizzes (Individual)
| Objective(s): | This addresses subject learning objective(s): 1, 2 and 3 |
|---|---|
| Weight: | 30% |
| Length: | 40 minutes |
Assessment task 2: Case Study (Group)
| Objective(s): | This addresses subject learning objective(s): 2 and 4 |
|---|---|
| Weight: | 20% |
Assessment task 3: Final Exam (Individual)
| Objective(s): | This addresses subject learning objective(s): 2, 3, 4 and 5 |
|---|---|
| Weight: | 50% |
Minimum requirements
Students must achieve at least 50% of the subject’s total marks.
Required texts
Essentials of Corporate Finance by Ross, Trayler, Hambusch, Koh, Westerfield and Jordan, 5th Edition, McGraw-Hill, 2019 (referred to as Ross).
The lecture notes, tutorial material and other resources are available on UTSOnline.
References
Fundamentals of Business Law UTS Custom by Barron, 1st edition, McGraw-Hill, 2015.
Robert Parrino, David S. Kidwell, Hue Hwa Au Yong, Michael Dempsey, Nigel Morkel-Kingsbury, Samson Ekanayake, Jennifer James, James Murray, Fundamentals of Corporate Finance, Australasian 3rd Edition, Wiley, 2018.
Gitman LJ, Juchau R, Flanagan J, Principles of Managerial Finance, 6th Edition, Pearson/Addison Wesley, 2010.