FINA201-17T (HAM)

Finance

20 Points

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Waikato Management School
Te Raupapa
Department of Finance

Staff

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Convenor(s)

Lecturer(s)

Administrator(s)

: maxine.hayward@waikato.ac.nz

Placement Coordinator(s)

Tutor(s)

: jianingtian@live.com
: yd82@students.waikato.ac.nz

Student Representative(s)

Lab Technician(s)

Librarian(s)

: clive.wilkinson@waikato.ac.nz

You can contact staff by:

  • Calling +64 7 838 4466 select option 1, then enter the extension.
  • Extensions starting with 4, 5 or 9 can also be direct dialled:
    • For extensions starting with 4: dial +64 7 838 extension.
    • For extensions starting with 5: dial +64 7 858 extension.
    • For extensions starting with 9: dial +64 7 837 extension.
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Paper Description

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The study of this paper consists of two fundamental and interrelated areas: Corporate finance and investment. Corporate finance deals with decisions that all firms make concerning their cash flows. The duties encountered in corporate finance include capital budgeting, capital structure and working capital management. The area of investment focuses on the decisions made by businesses and individuals as they choose securities for their investment portfolios. The major functions in the investment area range from determining the values, risks and returns associated with financial assets, such as stocks and bonds.

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Paper Structure

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Lectures

Provide quick access to the whys and hows of dealing with the questions in finance. Provide easy-to-understand information, including equations and examples that can be quickly applied to the problems of finance.

Tutorials

All students should attend 1 two-hour tutorial per week.

Final Test

ALL STUDENTS should note the necessity to attend the final test as scheduled. The final test is closed book.

The Final Test will include three sections: Multiple choice questions, calculation questions and short essay questions.

Mobile Phones and Cross Chats

As a courtesy to others, students are strongly urged not to disrupt lecture sessions by using their mobile phones and cross chatting during these sessions. Students are advised to disable their mobile phones during lectures.

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Learning Outcomes

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Students who successfully complete the course should be able to:

  • Introduction to finance [LO1]

    Understand what Finance is and realise the two general areas of Finance: Corporate Finance and Investment. Understand the three key concepts in finance: Risk, liquidity and valuation and learn how these concepts are key in making finance decisions.

    Linked to the following assessments:
  • Analysis of financial statements [LO2]

    Realise how to determine a firm’s cash flows. Be aware of where to find the information to calculate cash flow. Understand the differences between accounting income and cash flow.

    Linked to the following assessments:
  • Time and money [LO3]

    Explain and understand the time value of money. Realise why the cash flows at different time points could not be compared and aggregated directly.

    Linked to the following assessments:
  • Valuation of financial assets [LO4]

    Understand how to value bond and stock, and realise the differences between them.

    Linked to the following assessments:
  • Capital budgeting techniques [LO5]

    Realise how to use the net present value and other investment criteria to make capital budgeting decisions.

    Linked to the following assessments:
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Assessment

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Extra credit:

During the semester, we will run FIVE spot quizzes in lectures. These quizzes will provide you with feedback on how you are progressing in the paper, and give you the opportunity to practice multiple choice questions from the same test bank that we choose questions from for the final test. Each quiz will be just five minutes long, and consist of four (or five) multiple choice questions which may be on any topic covered up until the time of the quiz. Each spot quiz that you complete will be worth extra credit for the final test (1 quiz = 1 extra mark for final test). In order to earn the extra credit, you must be in class at the time when the quiz is undertaken. The answers for the quiz will be uploaded to Moodle (or discussed in lectures if time is allowed).

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Assessment Components

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The internal assessment/exam ratio (as stated in the University Calendar) is 1:0. There is no final exam. The final exam makes up 0% of the overall mark.

The internal assessment/exam ratio (as stated in the University Calendar) is 1:0 or 0:0, whichever is more favourable for the student. The final exam makes up either 0% or 0% of the overall mark.

Component DescriptionDue Date TimePercentage of overall markSubmission MethodCompulsory
1. Assignment I
19 Nov 2017
5:00 PM
20
  • Online: Submit through Moodle
2. Assignment II
3 Dec 2017
5:00 PM
30
  • Online: Submit through Moodle
3. Final Test
13 Dec 2017
2:00 PM
50
  • In Class: In Test
Assessment Total:     100    
Failing to complete a compulsory assessment component of a paper will result in an IC grade
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Required and Recommended Readings

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Required Readings

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Fundamentals of Corporate Finance 11ED (or 10ED), Ross et al.

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Recommended Readings

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Ross, S. A., Westerfield, R. W. and Jaffe, J. (2010), Corporate Finance, 8th Edition, USA: McGraw Hill.
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Other Resources

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Financial ratio analysis

Yahoo Finance: http://nz.finance.yahoo.com/

Reuters.com: http:// www.reuters.com

Amortization tables

Bankrate.com: http://www.bankrate.com/

Bond quotes

http://www.bondsonline.com/

Bloomberg for stock quotes

http://www.bankrate.com/

Morningstar for information on mutual funds, including volatility

http://www.morningstar.com/

Estimation of WACC

www.valuepro.net

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Online Support

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Lecture slides, tutorial resources and related teaching materials will be available in Moodle.

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Workload

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The course has about 36 (6X6) contact hours (lectures and tutorials). The rest of the 200 hour expected workload in this 20 point paper can be distributed as follows: 40 hours to complete the Assignment I, 40 hours to complete the Assignment II and 84 hours to study for and sit in the Final Test.

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Linkages to Other Papers

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I like to identify the interrelationship between finance and non-finance subject areas. First, both accounting and finance deal with decisions about money. The key difference between finance and accounting is “Time”. In brief, accounting deals with money in the past and current. Finance is concerned with money in the future.Second, finance and economics are related because economic activity and policy affect finance decisions, and vice versa. Finance and management are related because management decisions, such as setting salary, hiring new staff, and paying bonus must be coordinated with finance. Finance and information system are related because finance decisions rely on information. Last but not the least, there are Four Ps of marketing: Product, Price, Place, and Promotion. Clearly, Price and Promotion are related to finance.
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Prerequisite(s)

Corequisite(s)

Equivalent(s)

Restriction(s)

FINA202

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