
FINA510-18A (HAM)
Financial Theory and Corporate Policy
15 Points
Staff
Convenor(s)
Stuart Locke
4756
MSB.2.34
Tuesday 1200-1400
stuart.locke@waikato.ac.nz
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Administrator(s)
Librarian(s)
You can contact staff by:
- Calling +64 7 838 4466 select option 1, then enter the extension.
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Paper Description
This paper covers capital budgeting, capital structure and working capital management. Three key important questions are answered in this course: What long-term investments should the firm take on? Where will the firm get the long-term financing to pay for the investment? How will the firm manage the everyday financial activities? The paper will also covers the effects of biases and heuristics on financial management decisions and present the behavioral case for market inefficiency and related evidence pro and con.
Paper Structure
Provide quick access to the whys and how of dealing with the three most important questions in finance: Capital Budgeting, Capital Structure and Working Capital Management.
Provide easy-to-understand information, including equations and examples that can be quickly applied to most problems of corporate finance.
Provide knowledge about the difference between accounting income and cash flow as well as how to determine a firm’s cash flows.
Provide knowledge about how to make capital budgeting decisions.
Provide knowledge about how to determine a firm’s cost of capital.
Provide knowledge about how to manage a firm’s daily financial activities.
There will a 3-hour lecture and 1-hour workshop in each week. Students should get prepared before attending the lectures and tutorials.
Note: workshops start from the second week i.e. Week starting Monday 5 March 2018. Each workshop deals with learning materials from the previous week's lecture. Students are required to enrol in one of the workshop groups during the first week of lectures.
Learning Outcomes
Students who successfully complete the course should be able to:
Assessment
The assessment includes both individual and group components.
Assessment Components
The internal assessment/exam ratio (as stated in the University Calendar) is 50:50. The final exam makes up 50% of the overall mark.
Required and Recommended Readings
Required Readings
Textbook: Fundamentals of Corporate Finance by Ross, Westerfield, and Jordan. Standard 11th Edition
Recommended Readings
Ross, S. A., Westerfield, R. W. and Jaffe, J. (2010), Corporate Finance, 8th Edition, USA: McGraw Hill.
Online Support
PPT, marking guideline and related teaching materials will be available in Moodle.
Workload
The course has about 48 (4X12) contact hours (lectures and tutorials). The rest of the 200 hours expected workload in this 20-point paper can be distributed as follows: 40 hours to complete the two Assignments, 42 hours to prepare for and attend the Mid-term Test and 70 hours to prepare for and attend the Final Exam.
Linkages to Other Papers
Prerequisite(s)
Prerequisite papers: ECON204 and FINA201 or equivalent
Restriction(s)
Restricted papers: FINA311