Year
2021
Units
4.5
Contact
1 x 2-hour lecture weekly
1 x 1-hour tutorial weekly
Assessment
Assignment(s), Examination(s) 60%, Test(s) and Tutorial participation.
Topic description

This topic will introduce students to the theory and practical application of fundamental concepts used in business finance and funds management. Upon completion of this topic, students will have the foundational knowledge required to formulate and evaluate company investment and financing polices. Students will also examine modern portfolio theory and its application in practise. In summary, this topic will cover time value of money, risk and return, capital budgeting, cost of capital, valuation, capital-structure and portfolio management

Educational aims

This topic aims to:

  • Develop an understanding of fundamental concepts and theories used in business finance
  • Discuss and apply both analytical tools and capital budgeting techniques used in corporate investment decisions
  • Develop an understanding of capital markets, cost of capital and basic asset valuation
  • Identify and describe theories involving capital structure
  • Discuss and demonstrate the practical application of finance theory used in modern portfolio management
Expected learning outcomes
On completion of this topic you will be expected to be able to:

  1. Explain and apply time value of money
  2. Describe the relationship between risk and return
  3. Discuss and apply capital budgeting techniques to independent and mutually exclusive projects
  4. Apply basic valuation techniques to debt and equity securities
  5. Calculate the cost of capital
  6. Identify and briefly discuss theories that can be used to explain capital structure and dividend payout polices
  7. Differentiate between systematic and unsystematic risk and apply this knowledge to asses pricing and portfolio optimization

Key dates and timetable

(1), (2)

Each class is numbered in brackets.
Where more than one class is offered, students normally attend only one.

Classes are held weekly unless otherwise indicated.

FULL

If you are enrolled for this topic, but all classes for one of the activities (eg tutorials) are full,
contact your College Office for assistance. Full classes frequently occur near the start of semester.

Students may still enrol in topics with full classes as more places will be made available as needed.

If this padlock appears next to an activity name (eg Lecture), then class registration is closed for this activity.

Class registration normally closes at the end of week 2 of each semester.

Classes in a stream are grouped so that the same students attend all classes in that stream.
Registration in the stream will result in registration in all classes.
  Unless otherwise advised, classes are not held during semester breaks or on public holidays.