FINAN506-21B (HAM)

Corporate Finance

15 Points

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Division of Management
School of Accounting, Finance and Economics

Staff

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Convenor(s)

Lecturer(s)

Administrator(s)

: denise.martin@waikato.ac.nz

Placement/WIL Coordinator(s)

Tutor(s)

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, 9 or 3 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.
    • For extensions starting with 3: dial +64 7 2620 + the last 3 digits of the extension e.g. 3123 = +64 7 262 0123.
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Paper Description

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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 cover the effects of biases and heuristics on financial management decisions.

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Paper Structure

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Activities

1. Read teaching materials and other relevant resources;

2.Presentations

3. Complete assignments and

4. Participate in class discussions

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Learning Outcomes

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Students who successfully complete the paper should be able to:

  • Learning Outcome 1
    Discuss and explain how agency theory pervades decision making in corporate finance (LO1).
    Linked to the following assessments:
    Individual Assignment 1 (1)
  • Learning Outcome 2
    Understand the differences between cash flows and earnings, the relevance of market values over book values (LO2).
    Linked to the following assessments:
    Individual Assignment 1 (1)
  • Learning Outcome 3
      Identify the difference between bonds and stocks. Gaining insights into the bond features. Explain and show how
    stock prices affect dividend growth (LO3)
    Linked to the following assessments:
    Individual Assignment 2 (2)
  • Learning Outcome 4
      Conceptually understand, the Capital Budgeting Techniques and Analysing and Evaluating Projects (LO4).
    Linked to the following assessments:
    Individual Assignment 2 (2)
  • Learning Outcome 5
    Illustrate the basics of risk and return and security market line (LO5).
    Linked to the following assessments:
    Individual Assignment 2 (2)
  • Learning Outcome 6

    Understand how to determine a firm’s cost of equity capital, cost of debt and overall cost of capital (LO6) and Explain the effects of financial leverage on cash flows and the cost of equity (LO6)

    Linked to the following assessments:
    Individual Assignment 3 (3)
  • Learning Outcome 7

    Explain dividend policy and demonstrate the relationship between dividend policy and stock value and Short term Finance and Planning (LO7).

    Linked to the following assessments:
    Individual Assignment 3 (3)
  • Learning Outcome 8
    Illustrate the creation of cash budgets and the potential need for financing. Examination of the systems used by firms to handle cash inflows and outflows AND Evaluate working capital issues for small firms (LO8).
    Linked to the following assessments:
    Individual Assignment 5 (Project) (5)
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Assessment

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The assessments are individually worked components.

It is very important to keep track of the hours suggested as necessary for the various components of this Paper, including assessments. The standard of competency expected to be demonstrated through each assessment is closely related to what an average student can achieve in the hours indicated.

In practical terms, this means that a short response is unlikely to indicate hours of research going into the preparation of an answer. Similarly, up-to-date media-based examples (real-world business examples) are essential to demonstrate an in-depth understanding of concepts and techniques.

The Assessment components are internal assessments only. This paper doesn't have an exam.

Note: Typed answers or diagrams copied from the web or Panopto will be marked as zero. Turnitin (or a similar index) shouldn't be > 60%.

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Assessment Components

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The internal assessment/exam ratio (as stated in the University Calendar) is 50:50. There is no final exam. The final exam makes up 50% of the overall mark.

The internal assessment/exam ratio (as stated in the University Calendar) is 50:50 or 0:0, whichever is more favourable for the student. The final exam makes up either 50% or 0% of the overall mark.

Component DescriptionDue Date TimePercentage of overall markSubmission MethodCompulsory
1. Individual Assignment 1
8 Aug 2021
5:00 PM
20
  • Online: Submit through Moodle
2. Individual Assignment 2
12 Sep 2021
5:00 PM
20
  • Online: Submit through Moodle
3. Individual Assignment 3
3 Oct 2021
5:00 PM
20
  • Online: Submit through Moodle
4. Class Presentations 4
11 Oct 2021
1:00 PM
15
  • Hand-in: In Lecture
5. Individual Assignment 5 (Project)
25 Oct 2021
5:00 PM
25
  • Online: Submit through Moodle
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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Textbook: Fundamentals of Corporate Finance by Ross, Westerfield, and Jordan. Standard 12th Edition

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Recommended Readings

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Other Resources

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Links to useful online resources will be notified from time to time through Announcements.
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Online Support

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PowerPoint presentations, short Panopto briefings on useful issues and other useful resources will be available online and announced through Announcements.

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Workload

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The course has:

1. 24 (2X12) contact hours (lectures and tutorials)

2. 36 (3X12) hours to read chapters assigned

3. 5 hours to prepare for Individual Assignment 1

4. 5 hours to prepare for Individual Assignment 2

5. 5 hours to prepare for Individual Assignment 3

6. 10 hours to prepare for Individual Assignment 4

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Linkages to Other Papers

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Prerequisite(s)

Acceptance into the Master of Applied Finance programme.

Corequisite(s)

Equivalent(s)

Restriction(s)

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