Units
Finance 2
Unit code: EFB307
Contact hours: 3 per week
Credit points: 12
Information about fees and unit costs
This unit includes the following topics: the financing decision - capital structure, debt versus equity, lease versus debt, term structure versus default structure of interest rates; the dividend decision - dividends versus capital gains, franked versus unfranked income; firm valuation; free cash flow model; evaluation of takeovers; Risk and Return - diversification, the CAPM model, its practical application and its relationship to efficient market hypothesis; introduction to forwards, futures, options, warrants, convertibles and risk management using financial derivatives.
Availability
| Semester | Available |
|---|---|
| 2013 Semester 1 | Yes |
| 2013 Semester 2 | Yes |
Sample subject outline - Semester 1 2013
Note: Subject outlines often change before the semester begins. Below is a sample outline.
Rationale
This unit is an extension of the foundations of financial management introduced in EFB210 Finance 1. This unit provides an in depth analysis of the financial management of a business organisation and it develops further the framework necessary for the analysis of other and more advanced aspects of domestic and international business finance. With the growing sophistication of global financial markets, this unit provides an excellent base for students wishing to pursue a career in the field.
Aims
The aim of this unit is for you to develop an intermediate level of financial management skills through business finance theory and its application.
Objectives
Course Learning Goals (Undergraduate)
The QUT Business School has established the Assurance of Learning (AOL) Goals to meet contemporary industry needs and standards. Achieving these learning outcomes will assist you to meet the desired graduate outcomes set at QUT - aligned with other internationally renowned business schools. Students will develop the following capabilities relevant to a contemporary global and sustainable business environment:
Have knowledge and skills pertinent to a particular discipline (KS)
1.1 Integrate and apply disciplinary theory and skills to practical situations
1.2 Incorporate the use of technology appropriate to the discipline and context
Be critical thinkers and effective problem solvers (CTA)
2.1 Identify, research and critically analyse information relevant to a business problem or issue, be able to synthesise that information in order to evaluate potential solutions, make recommendations or otherwise effectively address the problem or issue
Be professional communicators in an intercultural context (PC)
3.1 Communicate effectively through written tasks appropriate to varied contexts and audiences
3.2 Communicate effectively through professional oral presentations appropriate to varied contexts and audiences
Be able to work effectively in a Team Environment (TW)
4.1 Demonstrate effective team skills in order to contribute appropriately to the production of a group output
Have a Social and Ethical Understanding (SEU)
5.1 Apply ethical reasoning, standards or codes of practice relevant to the discipline and make decisions that are informed by social and cultural understanding
Unit Objectives
Upon completion of this unit, you should be able to:
1. Evaluate the principles and frameworks of business finance theory.
2. Apply business finance theory in an empirical setting.
3. Critically analyse and solve intermediate business finance problems.
The specific course learning goals and unit objectives that apply to this unit are shown in the assessment section of this unit outline.
Content
In this unit the student will be introduced to the following topics:
Leasing
Approaches to Teaching and Learning
This unit has a formal class contact time in lectures and tutorials of approximately three hours (lecture two hours, tutorial one hour). Furthermore, you should expect to devote, on average, nine further hours per week to self-study and assignments. The nine non-formal hours should be seen as a guide only, and not to be regarded as a restriction on the hours devoted to the unit.
Resources such as copies of overheads for each lecture topic, weekly reading and tutorial guides, assignments and solutions are provided on the unit's Blackboard site at . You will need your student number and password.
You are expected to read the relevant material (textbook and notes), complete the self-study questions provided and to review the lecture slides before attending the lecture. A weekly reading and tutorial guide can be found on the Blackboard site. The reading guide indicates the material you should concentrate on, which material should be read lightly and which material should be studied in depth. Also included in the weekly guide are a number of self-study questions with solutions. These form an important part of the work in this unit and are a good indicator of possible examination questions. Historically, students who do not keep up with weekly tutorial work have a very poor success rate.
Solutions to the weekly self study questions will be provided in the weekly reading and tutorial guide and these will be discussed in the tutorial. Nevertheless, you should study this material before attending the tutorial, so that effective use can be made of the time allocated to solve difficulties and discuss further issues. It is not the purpose of the tutorial to work through each question from scratch, but rather to resolve any problems or difficulties that arise from the week's work.
To enhance the learning experience, spreadsheets of the tutorial exercises are available on unit's Blackboard site. You are encouraged to experiment with the files as they are designed to develop awareness of how finance theory and empirics integrate with technology in the form of spreadsheets.
Assessment
Students will receive feedback in various forms throughout the semester which may include:
Assessment name:
Mid-Semester Examination
Description:
The mid-semester exam is multiple choice and closed book. Note: negative marking on the multiple choice questions will not be employed. The mid-semester exam will test your proficiency in finance theory and its application in empirical settings. Exam feedback will be provided in a timely manner so that you can receive information on your progress in the unit at the approximate mid-way point of the semester. The exam will cover material from topics 1 to 5.
Length/Duration: 1 hour + 20 minutes perusal
Formative or Summative: Formative and Summative
Relates to objectives:
Unit objectives: 1, 2, 3 and AOL goals: KS (1.1), CTA (2.1), PC (3.1)
Weight:
20%
Internal or external:
Internal
Group or individual:
Individual
Due date:
Week 7
Assessment name:
End of Semester Examination
Description:
The final exam will consist of short answer, paragraph and one page essay style and calculation questions. Note: negative marking on the final exam will not be employed. To successfully complete the exam, students must demonstrate their depth of understanding of finance theory and how it is applied through various empirical settings. The final exam will cover topics 1 to 11 with an emphasis on topics 6 to 11.
Length/Duration: 2 hours + 10 minutes perusal
Formative or Summative: Formative and Summative
Relates to objectives:
Unit objectives: 1, 2, 3 and AOL goals: KS (1.1), CTA (2.1), PC (3.1)
Weight:
60%
Internal or external:
Internal
Group or individual:
Individual
Due date:
Central Exam Period
Assessment name:
Essay
Description:
The group assignment will cover topics 1 - 5 inclusive
Formative or Summative: Formative and Summative
Relates to objectives:
Unit objectives: 1,2,3,4,5 and AOL goasl: KS (1.1), (1,2), CTA (2.1), PC (3.1)
Weight:
20%
Internal or external:
Internal
Group or individual:
Group
Due date:
Week 8
Academic Honesty
QUT is committed to maintaining high academic standards to protect the value of its qualifications. To assist you in assuring the academic integrity of your assessment you are encouraged to make use of the support materials and services available to help you consider and check your assessment items. Important information about the university's approach to academic integrity of assessment is on your unit Blackboard site.
A breach of academic integrity is regarded as Student Misconduct and can lead to the imposition of penalties.
Resource materials
Prescribed Text
Peirson, G., Brown, R., Easton, S., Howard, P. and Pinder, S. (2012) Business Finance 11th Edition, McGraw Hill
Suggested supplementary text (optional)
Ross S. A., Thompson S. C., Christensen M. J., Westerfield R. W. and Jordan B. D., Fundamentals of Corporate Finance, McGraw-Hill, 4th edition, 2004 or any edition after.
References
Those students wishing to do additional reading on course topics should refer to the following list:
Bishop, S., Faff, R., Oliver, B. and Twite, T., (2004) Corporate Finance, Fifth Edition, Prentice Hall
Brealey, R., Myers S, Partington G. and Robinson D., (2008) Principles of Corporate Finance, McGraw Hill
Other Resources
Additional references and resources, including lecture overheads, additional notes, weekly reading and tutorial guides, assignments and solutions can also be found at the unit's Blackboard site: https://blackboard.qut.edu.au
Risk assessment statement
There are no out-of-the-ordinary risks associated with lectures or tutorials in this unit. You should, however, familiarise yourself with evacuation procedures operating in the buildings in which you attend classes and take the time to
view the Emergency video.
Disclaimer - Offer of some units is subject to viability, and information in these Unit Outlines is subject to change prior to commencement of semester.
Last modified: 13-Feb-2013
