University of Technology Sydney

20507 Corporate Finance

Warning: The information on this page is indicative. The subject outline for a particular session, location and mode of offering is the authoritative source of all information about the subject for that offering. Required texts, recommended texts and references in particular are likely to change. Students will be provided with a subject outline once they enrol in the subject.

Subject handbook information prior to 2024 is available in the Archives.

UTS: Business: Finance
Credit points: 6 cp

Subject level:

Undergraduate

Result type: Grade and marks

There are course requisites for this subject. See access conditions.

Description

This subject develops the concepts of corporate finance introduced in 25300 Fundamentals of Business Finance. This includes an examination of analytical techniques used in capital budgeting decisions and the capital structure decisions. Capital structure, estimation of the cost of capital and the dividend decision are examined from empirical and theoretical viewpoints.

Subject learning objectives (SLOs)

Upon successful completion of this subject students should be able to:
1. analyse and evaluate investment projects; identify and mitigate the underlying risks; and determine the appropriate funding structures
2. explain how firms can use market prices in their investment decisions and how their decisions are reflected in market prices; how incentives interfere with the process of value creation
3. identify the relevant parameters affecting a project; estimate their values using different approaches; and understand the implications of each approach

Contribution to the development of graduate attributes

The subject contributes to the aim of preparing students to commence a fulfilling and effective career in business, especially in finance-related professions. Its specific contributions are to enable students to develop their knowledge and understanding of the theory and practice of firm’s investment, financing and dividend decisions.

This subject contributes to the development of the following graduate attributes:

  • Business knowledge and concepts
  • Attitudes and values

This subject also contributes specifically to develop the following Program Learning Objectives:

  • Show an understanding of essential concepts necessary for a career in business (1.1)
  • Demonstrate interrelationships between differing business disciplines (1.2)
  • Critically analyse the core professional obligations, values and operations of organisations, including sustainability in teams in an inclusive manner (4.3)

Teaching and learning strategies

Lectures present and analyse relevant theories of financial decision making and practical exercises and applications are examined in tutorials as well as in the subject’s case study. Appropriate use is made of learning.futures practices, such as the use of on-line and off-line learning opportunities and flipped learning.

The teaching and learning activities consist of:

  1. Weekly lectures - This provides the main vehicle for the development of course content. Each week new material builds upon and develops earlier material.
  2. Weekly tutorials - Students are required to attempt the assigned problems prior to attending the classes. To promote self-managed and active learning experience, students will be asked to discuss their prepared answers in class.
  3. Pre-class online videos - Students are required to watch a number of online videos before coming to classes. This complies with UTS Flipped Learning approach that students access digital resources and undertake preliminary tasks prior to coming to classes.
  4. Pre-class online articles - Students are required to read the online articles before the classes, and discuss them in classes. This forms part of the Flipped Active Learning and collaborative learning activities.
  5. Canvas engagement - To stimulate collaborative learning, students are encouraged to use the online discussion board as a peer-support active and collaborative learning environment.
  6. Online multiple-choice question tests - To provide opportunities for students to receive feedback, various MCQ tests are available online during the session. The first test on the initial two topics is to provide early feedback to students before week 4. Other tests are to provide further self-assessment before the final examination.
  7. Weekly Self-Learning questions - To provide self-assessment and feedback, students are encouraged to attempt some basic problems chosen from the textbook. These problems help students understand the basic finance theories.

All the above teaching and learning materials are examinable.

Content (topics)

  • Estimating the cash flows and cost of capital of a project;
  • Evaluating and mitigating the risks of a project;
  • Measuring corporate performance;
  • Projects as real options;
  • The effect of industry competition on a firm’s profitability;
  • Estimating the firm’s cost of capital;
  • Determining the firm’s optimal financing and dividend policy.

Assessment

Assessment task 1: Assignment (Group)

Objective(s):

This addresses subject learning objective(s):

1, 2 and 3

Weight: 20%

Assessment task 2: In-class quizzes (Individual)*

Objective(s):

This addresses subject learning objective(s):

1 and 2

Weight: 30%
Criteria:

*Note: Late submission of the assessment task will not be marked and awarded a mark of zero.

Students who fail to attend the quiz will have the weighting of that assessment task added to the final examination conditional on the students submitting, receiving approval and complying with the requirements of special consideration in accordance with the UTS rules. If the composite mark for the final exam is more than 50%, the UTS rules on borderline result (range of 45-49, inclusive) shall apply whereby students will be allowed to undertake a supplementary final examination. Where a student completes and passes a supplementary examination, the maximum mark awarded for the subject will be 50 Pass.

Assessment task 3: Final Examination (Individual)

Objective(s):

This addresses subject learning objective(s):

1 and 2

Weight: 50%

Minimum requirements

Students must achieve at least 50% of the subject’s total marks.

Required texts

"Principles of Corporate Finance 14/e" by Brealey, Myers, Allen and Edmans, 2021 (ISBN: 978-1-265-07415-9). The 13th edition is also fine (ISBN: 978-1-260-56555-3) except that it doesn’t cover one chapter in week 5.

Lecture slides are available on Canvas. The lecture notes contain only key points and are not a substitute for the recommended textbook.