12608 (v.3) Finance (Decision Making) 315

Area:

School of Economics and Finance

Credits:

25.0

Contact Hours:

3.0

Seminar:

1 x 3 Hours Weekly

Prerequisite(s):

    9753 (v.6) Finance (Portfolio Management) 301 or any previous version
    OR
    11038 (v.4) Finance (Corporate) 307 or any previous version

Syllabus:

Using a case study approach, this unit encourages students to analyse and make decisions based upon real business situations. Case study content includes financial analysis and forecasting, the cost of capital, capital budgeting and resource allocation, management of shareholders equity, management of corporate debt, swaps, options and foreign currency, evaluating mergers, buyouts, setting corporate financial strategy.

Unit Outcomes:

On successful completion of this unit students will have- A basic knowledge and understanding of the relationship between corporate value, industry conditions and strategic choices. The concept of valuation. Credit analysis skills using sensitivity analysis of financial forecasts. The experience of a wide range of equity pricing models. Estimates of beta and manipulation of the levered beta formulas. Insights about capital markets, financial innovation and financial contracting. Determinants of corporatedebt probing. The concept of wealth transfers through the analysis of gains and losses among participants in the underwriting process. The large potential gains that may be made from financial restructuring of a project and the relationship between leverage and stock price.

Text and references listed above are for your information only and current as of September 30, 2003. Please check with the unit coordinator for up-to-date information.

Unit References:

Bruce, R, McKern, B, Pollard, I and Skully, M, Handbook of Australian Corporate Finance, Butterworths, Latest ed. Carey, E, Fast Money III, Allen & Unwin. Copeland, T E and Weston, J F (C&W), (1988), Financial Theory and Corporate Policy, 3rd ed, Addisonand Wesley. Dunstan, B, Understanding Finance with the Australian Financial Review, 2nd ed, Wrightbooks. Elton, E J and Gruber, M J, (1991) Modern Portfolio Theory and Investment Analysis, 4th ed, Wiley. Francis, Jack C, (1991), Investments: Analysis and Management, Fifth ed, McGraw Hill. Fuller, R and Farrell, (1988), Modern Investments and Security Analysis, McGraw Hill. Haugen, R A, Modern Investment Theory, (1990), Prentice Hall. Hutchinson, P, Alison, A, Gregory, W and Lumby, S, (1994), Financial Management Decisions - Principles and Applications, Thomas Nelson Australia. Levy, H and Sarnat, M, (1984) Portfolio and Investment Selection: Theory and Practice, Prentice Hall. Peirson, G, Bird, R, Brown, R and Howard, P, (1995), Business Finance, 7th ed, McGraw Hill. Petty, J, Peacock, R, Martin, P, Burrow, M, Keown, A, Scott, D and Martin, J, (1996) Basic Financial Management, Prentice Hall. Reilly, F K, (1989) Investment Analysis and Portfolio Management, 3rd ed, Dryden.

Unit Texts:

Bruner, R.F., Case Studies in Finance "Managing for Corporate Value Creation", 4th ed, Irwin Publishers.

Unit Assessment Breakdown:

Participation 10%, Presentations 60%, Quiz 10%, Take home exam 20%. This is by grade/mark assessment.

Year	Location	Period	Internal	Area External	Central External
2004	Bentley Campus	Semester 2	Y		Y
2004	Joondalup Campus	Semester 1	Y
2004	Joondalup Campus	Semester 2	Y