School of Accounting, Economics and Finance FIN 322: Advanced Corporate Finance Subject Outline 6 credit points
Subject Information Spring, 2015 Wollongong On Campus
Lecture Information: Wednesdays, 13:30 - 15:30, 25-107 Pre-requisites: FIN222 or FIN241 or FIN252 plus one other 200 or 300 level Finance subject Co-requisites: Nil Restrictions: None Contact Hours: 2 hours lecture and 1 hour tutorial Online Subject Material:
http://www.uow.edu.au/student/index.html
Teaching Staff Teaching Role
Coordinator, Lecturer and Tutor
Name
Dr Qigui Liu
Telephone
4221 3476
Email
[email protected]
Room
40.238
Consultation Times
To be Advised
Email Etiquette: Consultation with your subject coordinator and/or teachers via email Your teachers receive many emails each day. In order to enable them to respond to your emails appropriately and in a timely fashion, students are asked to observe basic requirements of professional communication: Consider what the communication is about
Is your question addressed elsewhere (e.g. in this subject outline or, where applicable, on the subject's eLearning site)? Is it something that is better discussed in person or by telephone? This may be the case if your query requires a lengthy response or a dialogue in order to address. If so, see consultation times above and/or schedule an appointment. Are you addressing your request to the most appropriate person?
Specific email title/ header to enable easy identification of subject related/ student emails
Identify the subject code of the subject you are enquiring about (as your teacher may be involved in more than one subject) in the email header. Add a brief, specific header after the subject code where appropriate
Professional courtesy
Address your teacher appropriately by name (and formal title if you do not yet know them). Use full words (avoid 'text-speak' abbreviations), correct grammar and correct spelling. Be respectful and courteous. Academics will normally respond within 1-2 days. If the matter is urgent, you may wish to telephone the Teaching Staff whose contact details are given in this subject outline or contacting the School. Please ensure that you include your full name and identify your seminar or tutorial group in your email so that your teachers know who they are communicating with and can follow-up personally where appropriate.
A guide to eLearning 'Netiquette' is available at http://www.uow.edu.au/student/elearning/netiquette/index.html . The basic principles of Netiquette also apply to email communication.
Copyright Commonwealth of Australia
Copyright Regulations 1969 © 2015 University of Wollongong The original material prepared for this guide is covered by copyright. Apart from fair dealing for the purposes of private study, research, criticism or review, as permitted under the Copyright Act, no part may be reproduced by any process without written permission.
Section A: General Information Learning Outcomes and Graduate Qualities Student Learning Outcomes
On successful completion of this subject, the student should be able to: 1. Demonstrate competence in applying modern corporate finance theory to financial management of corporate resources, financial planning and strategies in real world. 2. Demonstrate an understanding the increasing complexity of the real business environment and departure from the assumptions of an ideal capital markets. 3. Develop and construct corporate financial policies and management strategies, including the management of corporate debt and equity, mergers and acquisitions, financial distress, restructuring and financial architecture and strategies. 4. Demonstrate the application of the techniques involved in corporate financial management and strategic development. Subject Description
This subject examines advanced aspects of the financial management of corporate resources with an emphasis on issues in financial planning and strategy. Topics include firm governance and the role of shareholders and stakeholders, the management of corporate debt and equity, mergers and acquisitions, financial distress and restructuring, and financial architecture and strategies. Special attention is given to the increasing complexity of the business environment and departure from the assumptions of an ideal capital markets. Graduate Qualities
The Faculty has five Graduate Qualities which we aim to progressively develop in our students through learning and teaching.
Graduate Quality
Our graduates will:
Graduate Qualities Taught, Practised or Assessed in this Subject
have gained appropriate conceptual and applied knowledge that is research-based Informed
have developed skills for independent thinking and life-long learning
Yes
acknowledge the work and ideas of others be innovative in their thinking and work practices Innovative and Flexible
Socially Responsible
be flexible in their approach
Yes
be able to apply creativity and logical analysis to solving business and social issues appreciate the social and ethical dimensions of business be able to make informed choices for the benefit of society be able to work and network effectively with others
Connected
Communicators
appreciate the links between ideas and practice in domestic and international business, the public sector and community contexts demonstrate an effective level of interpersonal, written, and verbal communication skills show an understanding of intercultural communication practices
Yes
Yes
These qualities have also been formulated to contribute to the UOW Graduate Qualities. You can see how the Graduate Qualities are linked at http://business.uow.edu.au/future-students/graduatequalities/UOW152875.html
Readings, References and Materials Major Text(s) th
Ross, SA, Westerfield, RW., and Jaffe, J., Corporate Finance, 10 edition, McGraw Hill. The textbook costs $139.95. Textbook details are available online from the University Bookshop at http://unicentre.uow.edu.au/unishop/ Key References
1. Copeland, T., Weston, J. and Shastri, K. (2004) Financial Theory and Corporate Policy: International Edition, 4/e, Pearson. 2. Emery and Finnerty, Corporate Financial Management , Prentice-Hall, Inc., Upper Saddle River, NJ, 1997. 3. Frino, A., Kelly, S., Comerton-Forde, C., Cusack, T. and Wilson, K., 2004, Introduction to Corporate Finance, 2nd ed., Pearson/Prentice Hall, Sydney. 4. Grinblatt, M. and Titman, S (2002) Financial Markets and Corporate Strategy , 2nd ed. McGraw-Hill-Irwin. 5. Knox, D. M., Zima, P. and Brown, R. L. 1999, Mathematics of Finance , 2nd ed., Irwin/McGraw Hill, Sydney. 6. Peacock, R. et al, 2003, Financial Management , 3rd ed., Prentice Hall, Sydney 7. Peirson, G., Brown, R., Easton, S. and Howard, P. 2002, Business Finance, 8th Edition, McGraw Hill, Sydney. Recommended Background and Further Reading
Further reading may be selected from the key reference lists and will be advised in classes. This is not an exhaustive list of references. Students should also use the library catalogue and databases to locate additional resources.
Lectures, Tutorials and Attendance Requirements Lecture Times *
Lectures will be held on: Day
Start Time
End Time
Room
Wednesday
13:30
15:30
25-107
Lecture Program * Week Date
Topics Covered
(Emergency Evacuation Procedures) 1
29 Jul 2015 Capital Budgeting
Readings th
Ross et al 10 edition Chapters 5 and 6 t
2
05 Aug 2015
Risk Analysis, Real Options, and Capital Budgeting
Ross et al 10 edition Chapter 7
3
12 Aug 2015
Capital Asset Pricing Model Alternative Views of Risk and Return
Ross et al 10 edition Chapters 11 and 12
4
19 Aug 2015
Cost of Capital Efficient Capital Markets
Ross et al 10 edition Chapters 13 and 14
5
26 Aug 2015
Capital Structure
Ross et al 10 edition
t
th
t
Chapters 16 and 17 th
6
02 Sep 2015
Valuation and Capital Structure for the Levered Firm
Ross et al 10 edition Chapter 18 Ross et al 10 edition Chapter 20
t
7
09 Sep 2015
Raising Capital
8
16 Sep 2015
Mid-semester Exam th
9
Ross et al 10 edition Chapter 21
23 Sep 2015
Leasing
28 Sep 2015
Mid-Session Recess
10
08 Oct 2015
Options and Corporate Finance
Ross et al 10 edition Chapter 22 and 23
11
14 Oct 2015
Mergers and Acquisitions
Ross et al 10 edition Chapters 29 and 30 Ross et al 10 edition Chapter 31
th
th
t
12
21 Oct 2015
International Corporate Finance
13
28 Oct 2015
Review lecture
02 Nov 2015
Study Recess
07 Nov 2015
Examinations
16 Nov 2015
Examinations
* The above times and program may be subject to change. Students will be notified of any change via SOLS. Tutorial/Seminar/Workshop Times
The Faculty of Business uses the SMP Online Tutorial System and tutorial times and locations can be found at http://www.uow.edu.au/student/timetables/index.html . Please note that tutorial times on the timetable are provisional and may change.
Tutorial/Seminar/Workshop Program
Week
Week Commencing
Topics Covered
Readings and Activities
No tutorials in Week 1 All questions from the textbook; Ross, Westerfield, Jaffe; Corporate Finance C: Concept Questions Q&P: Questions and Problems
1
27 Jul 2015
No Tutorial
2
03 Aug 2015
No Tutorial
10 Aug 2015
Risk Analysis, Real Options, and Capital Budgeting
Ross et al 10 edition Chapter 7: Q&P: 7.17-19, 7.21
17 Aug 2015
Capital Asset Pricing Model Alternative Views of Risk and Return
Ross et al 10 edition Chapter 11: Q&P:11.8, 11.24, 11.32 and Chapter 12: Q&P: 12.2, 12.4
24 Aug 2015
Cost of Capital Efficient Capital Markets
Ross et al 10 edition Chapter 13: Q&P: 13.11, 13.15, 13.20 Chapter 14: Q&P: 14.4, 14.9, 14.15
3 4
t
t
th
5
th
6
31 Aug 2015
Capital Structure
Ross et al 10 edition Chapter 16: Q&P: 16.2, 16.24 Chapter 17: Q&P: 17.3, 17.4, 17.6, 17.7
7
07 Sep 2015
Valuation and Capital Structure for the Levered Firm
Ross et al 10 edition Chapter 18: Q&P: 18.10, 18.11, 18.13, 18.14,
t
18.18 8
14 Sep 2015
Mid-semester Exam
No Tutorial
21 Sep 2015
Raising Capital
Ross et al 10 edition Chapter 20: Q&P: 20.2, 20.4, 20.5, 20.6, 20.17, 20.18
28 Sep 2015
Mid-Session Recess
t
9
th
10
Leasing
Ross et al 10 edition Chapter 21: Q&P 21.13, 21.14, 21.15, 21.18
Options and Corporate Finance
Ross et al 10 edition Chapter 22: Q&P: 22.7, 22.11, 22.25 Chapter 23: Q&: 23.6, 23.8, 23.9
Mergers and Acquisitions
Ross et al 10 edition Chapter 29: Q&P: 29.8, 29.14, 29.16 Chapter 30: Q&P: 30.3
26 Oct 2015
International Corporate Finance
Ross et al 10 edition Chapter 31: Q&P: 31.4, 31.6, 31.7, 31.9, 31.12, 31.14
02 Nov 2015
Study Recess
07 Nov 2015
Examinations
16 Nov 2015
Examinations
06 Oct 2015
th
11
12 Oct 2015
th
12
19 Oct 2015
t
13
The above program may be subject to change.
Attendance Requirements Students are expected to attend all lectures, tutorials, workshops and seminars. Students may fail a subject unless they attend 80% of lectures, tutorials, workshops and seminars in each subject they take. Students may apply to have this requirement waived if their circumstances meet those listed in Student Academic Consideration Policy available at http://www.uow.edu.au/about/policy/UOW060110.html
Recent Improvements to Subject The Faculty of Business is committed to continual improvement in teaching and learning. In assessing teaching and learning practices in a subject, the Faculty takes into consideration student feedback from many sources. These sources include direct student feedback to tutors and lecturers, feedback through Business Central, responses to the Subject and Course Evaluation Surveys. These important student responses are used to make ongoing changes to subjects and courses. This information is also used to inform systemic comprehensive reviews of subjects and courses.
Section B: Assessment Assessment Summary Assessment Item
Form of Assessment
%
Assessment 1
In Session Tests
25%
Assessment 2
Tutorial/Lab Tasks
5%
Assessment 3
Authentic Tasks
10%
Assessment 4
Final Exam
60% TOTAL MARKS
100%
Please note: Assignments may be retained for Quality Assurance purposes. Past exam papers may be available for student review, subject to release by the library
(http://www.library.uow.edu.au/resourcesbytopic/UOW026643.html ). Solutions and marking guides are not included. The structure and/or content of the papers may change from session to session.
Assessment 1: In Session Tests - Mid-Semester Examination Graduate Qualities Assessed Informed Marking Criteria
Marks awarded for most correct response to multiple choice questions and correct technical knowledge and understanding of theoretical concepts for short answer questions.
Length
1 hour 20 minutes
Weighting
25%
Assessment Due
16 Sep 2015 (In Lecture in Session Week 8)
Type of Collaboration
Individual Assessment
Style and format
Multiple choice and short answer
Assessment submission
In lecture week 8.
Assessment return
Results will be released in Week 10 through SOLS.
Detailed information
The mid-semester exam will cover all topics up to and including week 6 lecture topics. The format of the exam will be advised during the lectures.
Assessment 2: Tutorial/Lab Tasks - Weekly Tutorial Assignments and Participation Graduate Qualities Assessed Informed
Connected Communicators Marking Criteria
(1) Typed answers (or writing in print) are to be shown to the tutor at the beginning of each tutorial. Students failing to meet this criterion will receive a zero mark for the tutorial for that particular week. (2) Students are also required to actively participate in tutorial discussions. (3) Attendance at tutorials is a compulsory requirement (see Students Code of Conduct) of this subject. (4) Marks awarded will be based on how many questions attempted and class participation. (5) The best 8 marks will be used to determine your mark for this assessment.
Length
Depends on the tutorial questions assigned for that particular week
Weighting
5%
Assessment Due
10 Aug 2015 (In Your Assigned Tutorial in Session Week 3) 17 Aug 2015 (In Your Assigned Tutorial in Session Week 4) 24 Aug 2015 (In Your Assigned Tutorial in Session Week 5) 31 Aug 2015 (In Your Assigned Tutorial in Session Week 6) 07 Sep 2015 (In Your Assigned Tutorial in Session Week 7) 21 Sep 2015 (In Your Assigned Tutorial in Session Week 9) 05 Oct 2015 (In Your Assigned Tutorial in Session Week 10) 12 Oct 2015 (In Your Assigned Tutorial in Session Week 11) 19 Oct 2015 (In Your Assigned Tutorial in Session Week 12) 26 Oct 2015 (In Your Assigned Tutorial in Session Week 13)
Type of Collaboration
Open Assessment
Style and format
1) Participation in tutorials. 2) tutorial preparations (response to weekly questions with typed answers or written in print)
Assessment submission
At tutorial
Assessment return
At tutorial
Detailed information
DUE DATE: In each weekly tutorial. Collection of the written answers is at the discretion of the lecturer/tutor.
Assessment 3: Authentic Tasks - Major Assignment Graduate Qualities Assessed Informed
Innovative and Flexible Communicators Marking Criteria
Computational accuracy, relevance and accuracy of interpretation of results, demonstration of understanding of the underlying theories, appropriate analyses, and neatness and style of report presentation. Specific marking criteria will include: • Understanding of the assignment question • Data collections and correct calculation • Ability to interpret and analyse the calculation results • Correct citation and reference • Meet the format requirement of the research report
Length
No more than 1,500 words.
Weighting
10%
Assessment Due
07 Oct 2015 (Wednesday in Session Week 10)
Type of Collaboration
Individual Assessment
Style and format
Will be informed in class and on Moodle Website.
Assessment submission
To submit the assignment, you must print an individualised cover sheet with a bar code from https://businessfaculty.uow.edu.au/coversheets/ Attach this cover sheet to the front of the assignment and take it to Business Central to be scanned and submitted. The assignment will electronically be recorded as "submitted" and an electronic receipt will be issued to your University email account. Please note that you will need to print the coversheet on a laser printer (use the library or computer lab printers if necessary) because ink jet printers may not print to the quality needed to make the barcode readable by the scanners. Please ensure that you have signed the plagiarism declaration before submitting your assignment for scanning at Business Central.
Assignments to be submitted to Business Central using barcode cover sheet no later than 4:00pm on the due date. Assessment return
In tutorial class in Week 13.
Detailed information
Details relating to the major assignment will be released via Moodle.
Assessment 4: Final Exam - Final Examination Graduate Qualities Assessed Informed Marking Criteria
Marks awarded for correct technical knowledge and understanding of theoretical concepts.
Length
3 hours
Weighting
60%
Assessment Due
To Be Announced
Type of Collaboration
Individual Assessment
Style and format
Will be advised in Week 13.
Assessment submission
N/A
Assessment return
N/A
Detailed information
The final exam will cover all topics covered in this subject. The final examination date will be confirmed during the course of the subject and published on SOLS before the examination period.
Performance Level Students are expected to complete all assessment tasks for this subject. In addition, you must achieve a total mark of 50% or over and obtain a minimum of 50% in the final examination. Failure to complete all assessment tasks will normally result in failure of the entire subject, other marks notwithstanding. Students should note that each credit point normally requires about 2 hours of study per week. Thus, a 6 credit point subject requires that students commit about 12 hours study a week, including attendance at lectures and tutorials. Students who fail a subject may be eligible for a supplementary exam depending on the final mark obtained for the subject and the final exam mark, or for other extenuating circumstances as approved by the relevant Head of School and Faculty Assessment Committee in line with University of Wollongong and Faculty of Business guidelines. Students who believe they may be eligible, and who have not already been advised accordingly, should consult their Lecturer or Subject Coordinator
Types of Assessment and Collaboration Collaboration between students during the preparation of subject assessment tasks or case studies is only permitted dependent upon the category of assessment task declared by the subject coordinator and as printed in the Subject Outline. Type 1 - Take Home Exams: No collaboration of any kind is permitted between students or anyone else
during formation and preparation of the contents of the student submission. Type 2 - Group Work: Collaboration is permitted between students in the same group but not with students in
other groups. Type 3 - Individual Assessment: Collaboration is permitted between students only in the form of general
discussion pertaining to relevant concepts or potential issues to be dealt with in completing the assessment. However, collaboration must not proceed to the point where it contributes directly to the final submission produced by the student. Joint planning of the actual contents of a student's submission is not permitted. Where the assessment requires formulation of a set of recommendations, a problem solution, or a specific course of action, collaboration is not permitted during their formulation. Needless to say, collaboration is not permitted during the actual preparation and writing of the student submission. Type 4 - Open Assessment: Collaboration with other students is permitted, subject to the normal rules
governing plagiarism. That is, direct use of ideas contributed by others must be acknowledged.
Submission, Retention and Collection of Written Assessment Assessed work must be handed in by the date and time listed under each assessment task. All assessment tasks must represent the enrolled student's own ORIGINAL work and must not have been previously submitted for assessment in any formal course of study. If a student does not attend a required in-session test/examination, and also fails to produce satisfactory medical or other reasons for this (See Section C: General Advice for Students), a deferred examination will NOT be offered, and the student may be deemed to have failed the subject, other marks notwithstanding. Submitting Assessment Tasks
Students are required to submit original work which will provide a basis for the certification of competence in this subject. These assessments may include: examinations, tests, take-home examinations, quizzes, assignments, essays, laboratory reports, demonstrations, folio of creative works, performances, tutorial presentation and participation. A Faculty of Business assignment cover sheet must be attached to each piece of written assessm ent task. This cover sheet can be obtained from the website: http://business.uow.edu.au/businesscentral/UOW155483.html . Students should ensure they receive a receipt of submission and retain this for proof of submission. Faxing, Posting and Emailing Assessment Work
Students may not e-mail, post or fax assessment tasks unless specifically requested by or with the prior approval of the subject coordinator. Late Submission of Assessment Tasks
Assessed work handed in late will be penalised by the deduction of 20 percent of the maximum possible mark for that assessment per working day or part thereof. The operation of this rule will not result in a negative mark being carried forward. This penalty for late submission may be waived upon presentation of a medical certificate of illness for a relevant period, or upon evidence of untoward or approved circumstances that fall under the Student Academic Consideration Policy (See Section C: General Advice for Students). Collection
Assessment items will normally be returned to students within three (3) weeks of the due date. Assessment tasks which are relevant to the final examination for the subject will be marked and available for collection prior to the study week before the final examination. Retention
The Faculty of Business will retain appropriate records in line with the State Records Act 1998 (NSW), other relevant legislation, standards and University of Wollongong policies.
Scaling Marks awarded for any assessment task or part of any assessment task, including an examination may be subject to scaling at the end of the session. Marks will be scaled only when unpredicted circumstances occur and in order to ensure fairness of marking across groups of students. The method of scaling will depend on the type of scaling required by the circumstances. When scaling is deemed necessary, it will follow a detailed consideration by the Unit Assessment Committee and/or the Faculty Assessment Committee of the marks of the group of students concerned. Scaling will not affect any individual student's rank order within their cohort. For more information please refer to Standards for the Finalisation of Student Results Schedule 1: Scaling Guidelines http://www.uow.edu.au/about/policy/UOW039331.html#P342_20490 for details.
Plagiarism The University's Academic Integrity and Plagiarism Policy, Faculty Handbooks and subject guides clearly set out the University's expectation that students subm it only their own original work for assessment and avoid plagiarising the work of others or cheating. Re-using any of your own work (either in part or in full) which you have submitted previously for assessment is not permitted without appropriate acknowledgement. Plagiarism can be detected and has led to students being expelled from the University. The use by students of any website that provides access to essays or other assessment items (sometimes marketed as 'resources'), is extremely unwise. Students who provide an assessment item (or provide access to an assessment item) to others, either directly or indirectly (for example by uploading an assessment item to a website) are considered by the university to be intentionally or recklessly helping other students to cheat. This is considered academic misconduct and students place themselves at risk of being expelled from the University. Students should visit the following University website a nd become familiar with the University's policy on Plagiarism http://www.uow.edu.au/about/policy/UOW058648.html Faculty of Business Plagiarism Prevention Policy
The Faculty of Business has introduced an e-learning module which aims to orientate you with the knowledge and resources to:
avoid problems related to plagiarism develop your capacity to integrate evidence into your arguments reference correctly.
The online module is openly available for use by students at any stage in their degree. You are strongly encouraged to use the module to help in assessing the academic integrity of your written work. The module can be accessed via http://businessfaculty.uow.edu.au/baio
Referencing Why do you need to reference?
At University it is necessary to acknowledge the sources of information and ideas that you have incorporated in your assessment tasks. Failure to do this thoroughly may result in accusations of plagiarism: this is the academic equivalent of stealing (because by not acknowledging someone else's work, you are presenting it as your own). Plagiarism is taken very seriously by the University and may result in expulsion from the University. Referencing is not only about acknowledging other people's work; accurate referencing and lists of references are beneficial when researching a topic as they allow the reader to follow up information and read further in the area. In a sense, references provide readers with clues to help them explore different avenues of a topic. This aspect of referencing will become more valuable to you as you progress in your studies. There is a correct procedure that must be followed when referencing and using footnotes. Not complying with these set techniques and format will most likely result in loss of marks. When writing an essay it is easiest to reference as you go, making sure you are writing down all relevant information. This will save hours trying to find the source again in the library. The Harvard System of Referencing
The Faculty of Business uses the Harvard system of referencing. This system makes use of short references within the body of the text. It is supplemented by a detailed list of references at the end of the text, which provides all the information necessary to find the source material. In-text references include the author and year of publication, and where necessary the page number(s). It is the responsibility of students to ensure that they are familiar with the Harvard system of referencing and that they use it accurately in all written work submitted.
Students should consult the following University Library website for a detailed explanation and examples of the Harvard system of referencing http://www.library.uow.edu.au/resourcesbytopic/UOW026621.html A referencing and citing guide is also available via the University Library website: http://public01.library.uow.edu.au/refcite/style-guides/html/ Citation of Internet Sources
It is necessary for students to reference all sources used in their written work, including file transfer protocol sites, worldwide web sites, telnet sites, synchronous com munications (MOOs, MUDs, IRC, etc.) GOPHER sites, and email, Listserv and Newsgroup citations. It is the responsibility of students to ensure that they are familiar with the accepted Faculty of Business practice for referencing electronic material and that they use it accurately in all written work submitted.
Students should consult the following University Library website for a detailed explanation and examples of how to reference electronic material: http://public01.library.uow.edu.au/refcite/style-guides/html/
Section C: General Advice for Students For general information on university policies and procedures relevant to students, and for details about the range of Student Services available, please see General Advice for Students, which can be accessed online at http://business.uow.edu.au/UOW144987.html. Hard copies of Section C: General Advice for Students can be obtained from Business Central.
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