Corporate Finance

This subject has the following teaching availabilities in 2015:

For the purposes of considering request for Reasonable Adjustments under the Disability Standards for Education (Cwth 2005), and Student Support and Engagement Policy, academic requirements for this subject are articulated in the Subject Overview, Learning Outcomes, Assessment and Generic Skills sections of this entry.

It is University policy to take all reasonable steps to minimise the impact of disability upon academic study, and reasonable adjustments will be made to enhance a student's participation in the University's programs. Students who feel their disability may impact on meeting the requirements of this subject are encouraged to discuss this matter with a Faculty Student Adviser and Student Equity and Disability Support: http://services.unimelb.edu.au/disability

Students should:

• comprehend the framework for the understanding of the principles underlying most of the important financial and investment decisions made by enterprises;
• be able to address with confidence the financial functions of management.

At the conclusion of the subject, students should understand the following concepts:

• The major financial problems faced by public and private firms. The specific problems of private firms are considered at length
• Techniques and instruments for managing risk. Especially insurance contracts and the use of hedging instruments such as futures contracts and swap contracts.
• Management of liquidity and working capital of the firm through bank lines of credit and trade credit.
• A broad understanding of the capital structure of the firm. In addition to the standard questions of debt v equity, long term v short term debt and fixed v floating debt, other forms of financing are considered, especially franchising and leasing.
• How firms use weighted average cost of capital in choosing projects. How real options affect the capital budgetting decision. How dividend imputation effects the WACC of firms.
• The essential features of relations between commercial banks and firms, and also investment banks and firms.

• Homework sets (10%)
  • Throughout subject
• Syndicate case reports (12.5%)
  • Staggered throughout subject
• Midterm test (25%)
  • 75 minutes hours
  • Middle of term
• Final examination (52.5%)
• Hurdle requirement
• 2.5 hours
• End of subject

This subject is not available as a breadth subject.