Financial Decision Making

This subject has the following teaching availabilities in 2011:

For the purposes of considering requests for Reasonable Adjustments under the Disability Standards for Education (Cwth 2005), and Students Experiencing Academic Disadvantage Policy, academic requirements for this subject are articulated in the Subject Description, Subject Objectives, Generic Skills and Assessment Requirements for this entry.

The University is dedicated to provide support to those with special requirements. Further details on the disability support scheme can be found at the Disability Liaison Unit website: http://www.services.unimelb.edu.au/disability/

On successful completion of this subject, students should be able to:

• Analyse the environment in which different forms of corporate entities operate and the regulatory constraints imposed;
• Explain the fundamental elements of the balance sheet and the profit and loss and cash flow statements;
• Apply basic financial mathematical techniques;
• Recognise the fundamentals of capital budgeting; the use of discounted cash flow techniques and the contribution of alternative methods of project evaluation;
• Apply Du Pont analysis to generate financial ratios that aid in explaining cross-sectional variations in firm performance;
• Explain the benefits of diversification and the main drivers of those benefits;
• Differentiate between alternative forms of risk and understand the link between risk and return in a competitive market;
• Describe the nature of leverage, the constraints firms face in its use and evaluate the impact of its presence firm sustainability;
• Evaluate the alternatives available to a firm when deciding how to distribute its profits (if at all).

• One 2-hour end-of-semester examination (50%)
• A mid-semester (30%)
• Two group assignments not exceeding 1500 words each (20%)

This subject is not available as a breadth subject.

On successful completion of this subject, students should have improved the following generic skills:

• An in-depth knowledge of financial markets through an interpretation and analysis of the environments in which these markets operate and through; critical , creative and evaluative thinking in relation to alternative forms of risk
• Communication skills which will be developed through an engagement with the public discourse
• Problem solving skills through discussion of decisions in relation to appropriate debt levels for firms and returns to shareholders
• Synthesis of data and other information through discussion of alternatives in decision making in firms
• Evaluation of data and other information through differentiation of forms of risk
• Interpersonal and decision-making skills and receptiveness to alternative ideas through tutorial and team work/collaborative exercises
• Ethical thinking and work practice skills in financial decision making through exercises and case studies

This subject is only available to students enrolled in the Master of Management