25765 Corporate Finance
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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 2025 is available in the Archives.
Credit points: 6 cp
Subject level:
Postgraduate
Result type: Grade and marksRequisite(s): 25742 Financial Management OR 25799 Finance for Managers
These requisites may not apply to students in certain courses.
There are course requisites for this subject. See access conditions.
Description
This subject exposes students to advanced corporate financial management by initially considering an economy with no risks and no market imperfections and then relaxing these assumptions to consider a more realistic economic environment. Topics covered include capital budgeting, cost of capital, capital structure and valuation, dividend policy and mergers and acquisition. Particular attention is paid to different tax environments and agency relationships within the firm.
Subject learning objectives (SLOs)
| 1. | apply corporate financial theory, policy and practice in a range of firm |
|---|---|
| 2. | analyse the essential nature of risk and uncertainty and apply them in capital budgeting, financial structure, cost of capital and dividend policy |
| 3. | explain the critical financial decisions in a simple world of certainty, and apply asset-pricing models that incorporate risk reviewing their implications for these financial decisions |
| 4. | evaluate the behavioural assumptions embedded in the asset pricing models and examine the implications of the resulting agency relationships for corporate financial practice. |
Contribution to the development of graduate attributes
This subject provides an up-to-date understanding of the finance functions within a large organisation under different tax regimes. It also integrates with other courses offered within the program. For example, investment decision-making requires consideration of risk/return relationships and financing costs. Corporate financial analysis requires substantial examination of debt/equity and dividend decisions. International finance requires international investment, global financing and cost of capital decisions.
Teaching and learning strategies
The subject will be taught using a combination of lectures and workshops. These classes will be supplemented with both printed and electronic learning materials and resources. The learning management system will be used to share information and encourage interaction between staff and students. Students will also use appropriate computer software such as Excel and Word to complete assigned tasks.
Some lecture-related videos will be made available to students before class, and students should be prepared to discuss these in class. Similarly, some topical newspaper or journal articles will be included in the course notes booklet after various lectures, and students should be prepared to discuss these in class. These videos and articles will bridge the gap between academic theories and practice.
There will be a group assignment, which will involve students collaboratively analysing the capital structure of an ASX listed company and producing a written report of their analysis. This exercise will allow students to gain valuable experience in applying their subject learning in the real-world context. Students are expected to work on the group assignment collaboratively. Please consult the document “Working Arrangements for the Group Case Study” for further details on how the group assignment work should be planned and organised among the group members.
Content (topics)
- Fisher’s Separation Theorem and the net present value approach to capital budgeting and valuation
- Cost of capital and risk analysis, including decision trees, sensitivity analysis, and scenario analysis
- The use of options in corporate finance
- Capital structure and financing: taxes, bankruptcy costs, stakeholder theory, agency theory and signalling theory
- Payout policy and the Australian imputation system
- Valuation and capital budgeting with leverage
- Mergers and acquisitions
Assessment
Assessment task 1: Quizzes (Individual)*
| Objective(s): | This addresses subject learning objective(s): 1, 2 and 3 |
|---|---|
| Groupwork: | Individual |
| Weight: | 10% |
| Length: | 90 minutes |
| Criteria: | *Note: Late submission of the assessment task will not be marked and awarded a mark of zero. Students who do not complete 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 percent and the student is in the final subject of their degree, 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 2: Financial News Report
| Objective(s): | This addresses subject learning objective(s): 1, 2 and 3 |
|---|---|
| Groupwork: | Individual |
| Weight: | 10% |
Assessment task 3: Assignment (Group)
| Objective(s): | This addresses subject learning objective(s): 1, 2 and 3 |
|---|---|
| Groupwork: | Group, group assessed |
| Weight: | 30% |
Assessment task 4: Final Exam (Individual)
| Objective(s): | This addresses subject learning objective(s): 1, 2, 3 and 4 |
|---|---|
| Groupwork: | Individual |
| Weight: | 50% |
Minimum requirements
Students must achieve at least 50% of the subject’s total marks.
Required texts
Primary Textbook
Corporate Finance, Berk and DeMarzo, 5th edition, ISBN 9781292304151
Learning Materials
PDF copies of all learning material are available on UTS Canvas including:
- The lecture slides contain only the main points of the subject matter. The slides are not a substitute for the textbook.
- Tutorial questions and answers
- Supplementary materials
References
UTS Canvas
We will use UTS Canvas for communicating information and for facilitating un-moderated discussions
- UTS Canvas will be used to make announcements about the subject
- Students must check UTS Canvas at least once a week
- Electronic copies of subject materials such as subject outline and lecture notes, and students' assessment marks will posted online