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FINM7007
Applied Corporate Finance
Course Description
This course focuses on tools and techniques used in modern financial management.
Material in the course has an applied focus and is designed to provide students with the
knowledge and skills required for understanding, exploring and analysing financial
managment issues. The course draws upon topical material in order to contextualise
theoretical discussion, and present students with examples in practice.
Semester and Year
Course URL
Mode of Delivery
Prerequisites
Course Convener
Office Location:
Phone:
Email:
Consultation hours:
Bio and research interests
Student Administrators
Semester 1, 2015
http://programsandcourses.anu.edu.au/course/FINM7007
On campus lectures, workshops and tutorials
Completed or enroll in STA7055 and FINM7006; completed
BUSN7008 or BUSN8181
Dr Xin Liu
CBE Building, Room 3.63
02-6125-7370
[email protected]
TBA
Corporate Finance
Ms Tracy Skinner
[email protected]
CBE Bld (26C), Room 4.50
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COURSE OVERVIEW
Course Learning Outcomes
Upon successful completion of the requirements for this course, students will be able to:
 Attain basic knowldege of some the key issues facing financial managers
 Develop proficiency in the ares of asset valuation and project evaluation and;
 Deepen their understanding of finance theory underlying financial management.
Research-Led Teaching
Students undertaking this course will be imparted with the necessary skills for industry
based research. This will include involving students in critical analysis of industry based
problems such as valuation, capital budgeting and risk assessment.
Technology, Software, Equipment
A non-programmable scientific calculator is a necessity for every enrolled student in this
course.
Requisites
To enrol in this course you must have completed or be enroled in STAT7055,
completed FINM7006, and completed BUSN7008 or BUSN8181.
The assignment may involve the use of a PC or Mac computer. You need to be
familiar with word processors and with spreadsheets (in particular Excel)
Student Feedback
All CBE courses are evaluated using Student Experience of Learning and Teaching (SELT)
surveys, administered by Planning and Statistical Services at the ANU. These surveys are
offered online, and students will be notified via email to their ANU address when surveys are
available in each course. Feedback is used for course development so please take the time
to respond thoughtfully. Course feedback is anonymous and provides the Colleges,
University Education Committee and Academic Board with opportunities to recognise
excellent teaching and to improve courses across the university.
For more information on student surveys at ANU and reports on feedback provided on ANU
courses, visit http://unistats.anu.edu.au/surveys/selt/students/ and
http://unistats.anu.edu.au/surveys/selt/results/learning/
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COURSE SCHEDULE
Lecture: Monday, 3-5pm, Location: MCC T3
Workshop: Friday, 1-2pm, Location: MCC T2
Week
1 (Feb 16)
Summary of Activities
Introduction and Revision
of Assumed Knowledge
Investment Decision
Rules
Capital Budgeting:
Fundamentals
Equity and Debt
Financing
Activity
Lecture
Readings
Notes
Lecture notes 1
Ch 1, 3-6, 9, 11
2 (Feb 23)
Lecture/Tutorial Lecture notes 2,
Ch 7
3 (Mar 2)
Lecture/Tutorial Lecture notes 3
Ch. 8-9
4 (Mar 9)
Lecture/Tutorial Lecture notes 4 Monday-public
Ch. 23-24
holiday,
reschedule-TBA
5 (Mar 16) Cost of Capital
Lecture/Tutorial Lecture notes 5
Ch. 10-12
6 (Mar 23) Capital Structure I: MM Lecture/Tutorial Lecture notes 6
Theory
Ch. 14
7 (Mar 30) Capital Structure II:
Lecture/Tutorial Lecture notes 7 Mid-term
Taxes
Ch. 15
Mid-semester break: 6 Apr to 19 Apr inclusive
8 (Apr 20) Capital Structure III:
Lecture/Tutorial Lecture notes 8
Financial Distress,
Ch. 16
Agency Cost, Trade-off
Theory, and Information
9 (Apr 27) Payout Policy
Lecture/Tutorial Lecture notes 9
Ch. 17
10 (May 4) Capital Budgeting:
Lecture/Tutorial Lecture notes 10
Extensions
Ch. 18
11 (May 11) M&A
Lecture/Tutorial Lecture notes 11
Ch.28
12 (May 18) Corporate Governance Lecture/Tutorial Lecture notes 12
Ch.29
13 (May 25) Review
Lecture/Tutorial Lecture note 13
COURSE ASSESSMENT
Assessment Summary
Item
1
2
3
Title
Mid-Term exam: (optional
and redeemable)
Group assignment
Final exam
Value
25% (or 0% if not
attempted/redeemed)
20%
55% (or 80% if midterm not
attempted/redeemed)
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Due Date
TBA
TBA
TBA
Mid-Term Exam: total weighting 25% or 0%
Duration – 1.5 hour (date: TBA)
The mid-term exam is optional and redeemable. Specifically, if a student takes the mid-term
exam, but gets a higher mark in the final exam, then the final mark will count for 80% of the
assessment, while the lower mid-term exam mark will not be counted. The mid-term exam
will be held in week 7. The exam is a closed-book exam with no formula sheet provided and
will cover topics from week 1 to week 6. More details regarding the exam will be provided as
the exam approaches.
Group Assignment: total weighting 20%
One group assignment will be given on lecture topics which enables students to apply
techniques learned in the course to practical problems. In addition, it allows the opportunity
for team work and tests the student’s analytical skills and writing capabilities. Group will be
assigned by the lecturer and students are expected to collaborate with other group members
to work on the assignment.
More details regarding the assignment will be provided later. Only 1 copy of the assignment
solution is required for each group at submission. No extension is allowed and students
failed to submit assignment reports on time will be given a zero. In the report, please clearly
cite any reference used in your assignments, reports and etc.
Final Examination: total weighting 55% or 80%
Duration – 3 hours (date: TBA)
This is a close book exam and no formula sheet is allowed. The final exam is worth 55% (or
80% if the mid-term exam is redeemed). A mixture of theory and practical (numerical)
questions will be asked. Students will need to review and revise all material (weeks 1-13)
pertaining to the course. Students will be provided with further details regarding the exam as
it approaches. The marking criteria will be based on model solutions and answers prepared
by the lecturer.
The final exam is designed to: (i) test the students’ understanding and comprehension of the
course material; (ii) ensure they have obtained the learning objectives of the course.
Results and Examinations
Your final mark for the course will be based the raw marks allocated for each of your
assessment items. However, you final mark may not be the same number produced by that
formula, as marks may be scaled. Any scaling applied will preserve the rank order of raw
marks and may be either up or down.
READING LISTS
Prescribed text:
“Corporate Finance”, 3rd Edition, by Berk and DeMarzo, ISIN: 978-0-273-79202-4
Other Reading
“Valuation – Measuring and Managing the Value of Companies”, McKinsey & Company, by
Koller, Goedhart, and Wessels
Code of Ethics and Standards of Professional Conduct:
http://www/cfainstitute.org/learning/products/publications/ccb/Pages/ccb.v2010.n14.1.aspx
Standards of Practice Handbook (pages 1-9; 49-68)
http://www/cfainstitute.org/learning/products/publications/ccb/Pages/ccb.v2010.n2.1.aspx#
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TUTORIAL AND/OR SEMINAR REGISTRATION
Enrolment in tutorials will be completed online using the CBE Electronic Teaching Assistant
(ETA). To enrol, follow these instructions:
1. Go to http://eta.fec.anu.edu.au
2. You will see the Student Login page. To log into the system, enter your University ID (your
student number) and password (your ISIS password) in the appropriate fields and hit the
Login button.
3. Read any news items or announcements.
4. Select "Sign Up!" from the left-hand navigation bar.
5. Select your courses from the list. To select multiple courses, hold down the control key.
On PCs, this is the Ctrl key; on Macs, it is the
key. Hold this key down while selecting
courses with the mouse. Once courses are selected, hit the SUBMIT button.
6. A confirmation of class enrolments will be displayed. In addition, an email confirmation of
class enrolments will be sent to your student account.
7. For security purposes, please ensure that you click the LOGOUT link on the confirmation
page, or close the browser window when you have finished your selections.
8. If you experience any difficulties, please contact the School Office (see page 1 for contact
details).
9. Students will have until the end of week 2 to finalise their enrolment in tutorials. After this
time, students will be unable to change their tutorial enrolment.
COMMUNICATION
Email
If necessary, the lecturers and tutors for this course will contact students on their official
ANU student email address. Information about your enrolment and fees from the Registrar
and Student Services' office will also be sent to this email address.
Announcements
Students are expected to check the Wattle site for announcements about this course, e.g.
changes to timetables or notifications of cancellations. Notifications of emergency
cancellations of lectures or tutorials will be posted on the door of the relevant room.
Course URLs
More information about this course may be found on:
• Programs and Courses (http://programsandcourses.anu.edu.au/2015/Catalogue)
• The College of Business and Economics website (http://cbe.anu.edu/courses) and
• Wattle (https://wattle.anu.edu.au), the University's online learning environment. Log on to
Wattle using your student number and your ISIS password.
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POLICIES
The University offers a number of support services for students. Information on these is
available online from http://students.anu.edu.au/studentlife/
ANU has educational policies, procedures and guidelines, which are designed to ensure that
staff and students are aware of the University’s academic standards, and implement them.
You can find the University’s education policies and an explanatory glossary at:
http://policies.anu.edu.au/
Students are expected to have read the Student Academic Integrity Policy before the
commencement of their course.
Other key policies include:


Student Assessment (Coursework)
Student Surveys and Evaluations
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