Finance Theory - Corporate Finance

This subject has the following teaching availabilities in 2016:

Estimated total time commitment of 120 hours per semester

Admission to the PhD program in Finance

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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

This subject will cover both theory and evidence. Topics covered will include raising capital, capital structure choice, dividend policy, mergers and acquisitions, contracting and incentives, game theory and signalling models, default and renegotiation and security design.

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

• Analyse firms’ investment decisions under idealized settings and explain the importance of these decisions for shareholders and the economy
• Analyse the legal and institutional determinants of investment and financing decisions
• Analyse effects of moral hazard and adverse selection on firms’ investment and financing decisions
• Analyse the effects of contracts on problems of moral hazard and adverse selection
• Analyse dynamic models of investment and financing decisions and compare these with traditional static models

• 2000 word assignment or equivalent (20%)
• 2 hour mid semester examination (40%)
• 2 hour end-of-semester examination (40%)

You will be advised of prescribed texts by your lecturer.

This subject is not available as a breadth subject.

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

• Oral communication
• Written communication
• Collaborative learning
• Problem solving
• Team work
• Statistical reasoning
• Application of theory to practice
• Interpretation & analysis
• Critical thinking
• Synthesis of data and other information
• Evaluation of data and other information
• Using computer software
• Accessing data and other information from a range of sources