Course overview
- Study period
- Semester 2, 2024 (22/07/2024 - 18/11/2024)
- Study level
- Postgraduate Coursework
- Location
- St Lucia
- Attendance mode
- In Person
- Units
- 2
- Administrative campus
- St Lucia
- Coordinating unit
- Business School
This course provides an in-depth analysis of financial issues confronting most firms, with a strong focus on application and practical relevance. Topics include financing and dividend policy, real option valuation, risk management and mergers and acquisitions.
FINM7402 Corporate Finance equips students with an analytical framework for decision-making in financial management and firm valuation. It covers both theoretical and practical concepts related to capital structure, risk management, real options, raising equity funds, corporate governance, and mergers and acquisition decisions. This course bridges foundational finance concepts with their application in practical corporate settings.
Course requirements
Assumed background
Students are expected to have a thorough knowledge of all material covered in an introductory finance course, comparable breadth and difficulty to FINM7401 Finance. I emphasise the words "thorough knowledge" of this material. Students who enrol in Corporate Finance without this knowledge find the course extremely difficult and have a significantly lower probability of successful completion.
Before attempting this course, students are advised that it is important to complete the appropriate prerequisite course(s) listed on the front of this course profile. No responsibility will be accepted by the School of Business, the Faculty of Business, Economics and Law or The University of Queensland for poor student performance occurring in courses where the appropriate prerequisite(s) has/have not been completed, for any reason whatsoever.
Prerequisites
You'll need to complete the following courses before enrolling in this one:
FINM7065 or 7401 or 7805
Incompatible
You can't enrol in this course if you've already completed the following:
FINM2415 or 3401
Restrictions
Quota: Minimum of 15 enrolments
Course contact
Course staff
Lecturer
Timetable
The timetable for this course is available on the UQ Public Timetable.
Additional timetable information
Please note: Teaching staff do not have access to the timetabling system to help with class allocation. Therefore, should you need help with your timetable and/or allocation of classes, please ensure you email business.mytimetable@uq.edu.au from your UQ student email account with the following details:
- Full Name
- Student ID
- Course Code
Aims and outcomes
This course aimsﾠto provide a deep understanding of the theory that forms the basis of corporate finance, and how this theory can be practically applied in a real world setting.
Learning outcomes
After successfully completing this course you should be able to:
LO1.
Analyse whether a proposed corporate transaction is in the best interests of the firm's shareholders.
LO2.
Determine the optimal capital structure for a firm.
LO3.
Estimate a firm's weighted average cost of capital under classical and imputation systems, and analyse the relation between capital structure, the cost of capital and value.
LO4.
Perform an internally consistent corporate valuation using the discounted cash flow approach.
LO5.
Identify real options which are likely to affect firm value and perform a real options valuation.
Assessment
Assessment summary
| Category | Assessment task | Weight | Due date |
|---|---|---|---|
| Examination |
In-Semester Exam
|
30% |
Week 7
During Lecture Time. Students DO NOT need to come to the class to take the test. |
| Paper/ Report/ Annotation, Project | Case analysis | 20% |
9/10/2024 2:00 pm |
| Examination |
Final exam
|
50% |
End of Semester Exam Period 2/11/2024 - 16/11/2024 |
Assessment details
In-Semester Exam
- Online
- Mode
- Written
- Category
- Examination
- Weight
- 30%
- Due date
Week 7
During Lecture Time. Students DO NOT need to come to the class to take the test.
- Other conditions
- Time limited.
- Learning outcomes
- L02, L03, L04
Task description
The In-Semester Exam covers Topics 1 to 4. It contains MCQs and short answer questions on theory and problem-solving.
This is a Blackboard online assessment to be submitted via Blackboard.
AI Statement:
This assessment task is to be completed online. The use of generative Artificial Intelligence (AI) tools will not be permitted. Any attempted use of Generative AI may constitute student misconduct under the Student Code of Conduct.
Exam details
| Planning time | 10 minutes |
|---|---|
| Duration | 90 minutes |
| Calculator options | Any calculator permitted |
| Open/closed book | Open Book examination |
| Exam platform | Learn.UQ |
| Invigilation | Not invigilated |
Submission guidelines
Deferral or extension
You may be able to defer this exam.
Late submission
Exams submitted after the end of the submission time will incur a late penalty.
Case analysis
- Mode
- Written
- Category
- Paper/ Report/ Annotation, Project
- Weight
- 20%
- Due date
9/10/2024 2:00 pm
- Learning outcomes
- L01, L03, L04
Task description
This is an individual case study. Students will need to apply the relevant theories to estimate the cost of capital and optimal capital structure. The submission has two parts. In the report section, students will be required to discuss corproate governance, cost of capital, optimal capital structure, and dividend policy of the given firm. In the spreadsheet submission, students need to show all calculations related to cost of capital, capital structure, and dividend policy of the given firm.
Further details about the case study's format, expectations, criteria and submission requirements will be available on the course Blackboard site.
AI Statement:
This assessment task evaluates students' abilities, skills and knowledge without the aid of generative Artificial Intelligence (AI). Students are advised that the use of AI technologies to develop responses is strictly prohibited and may constitute student misconduct under the Student Code of Conduct.
Submission guidelines
Submit in Blackboard Assessment link.
Deferral or extension
You may be able to apply for an extension.
Late submission
A penalty of 10% of the maximum possible mark will be deducted per 24 hours from time submission is due for up to 7 days. After 7 days, you will receive a mark of 0.
Final exam
- In-person
- Mode
- Written
- Category
- Examination
- Weight
- 50%
- Due date
End of Semester Exam Period
2/11/2024 - 16/11/2024
- Learning outcomes
- L01, L02, L03, L04, L05
Task description
The final exam covers topics 1 to 10 and consists of short answer, short discussion, and problem-solving questions.
UQ will centrally organise the time for this final examination. If you are unable to sit the exam because of illness or other valid reasons, you need to follow UQ Business School's procedure relating to Deferred Exams.
AI Statement:
This assessment task is to be completed in-person. The use of generative Artificial Intelligence (AI) tools will not be permitted. Any attempted use of Generative AI may constitute student misconduct under the Student Code of Conduct.
Exam details
| Planning time | 10 minutes |
|---|---|
| Duration | 120 minutes |
| Calculator options | (In person) Casio FX82 series or UQ approved , labelled calculator only |
| Open/closed book | Closed Book examination - no written materials permitted |
| Exam platform | Paper based |
| Invigilation | Invigilated in person |
Submission guidelines
Deferral or extension
You may be able to defer this exam.
Course grading
Full criteria for each grade is available in the Assessment Procedure.
| Grade | Cut off Percent | Description |
|---|---|---|
| 1 (Low Fail) | 0 - 29 |
Absence of evidence of achievement of course learning outcomes. |
| 2 (Fail) | 30 - 46 |
Minimal evidence of achievement of course learning outcomes. |
| 3 (Marginal Fail) | 47 - 49 |
Demonstrated evidence of developing achievement of course learning outcomes |
| 4 (Pass) | 50 - 64 |
Demonstrated evidence of functional achievement of course learning outcomes. |
| 5 (Credit) | 65 - 74 |
Demonstrated evidence of proficient achievement of course learning outcomes. |
| 6 (Distinction) | 75 - 84 |
Demonstrated evidence of advanced achievement of course learning outcomes. |
| 7 (High Distinction) | 85 - 100 |
Demonstrated evidence of exceptional achievement of course learning outcomes. |
Additional course grading information
Grades will be allocated according to University-wide standards of criterion-based assessment.
Supplementary assessment
Supplementary assessment is available for this course.
Learning resources
You'll need the following resources to successfully complete the course. We've indicated below if you need a personal copy of the reading materials or your own item.
Library resources
Find the required and recommended resources for this course on the UQ Library website.
Learning activities
The learning activities for this course are outlined below. Learn more about the learning outcomes that apply to this course.
Filter activity type by
Please select
| Learning period | Activity type | Topic |
|---|---|---|
Week 1 |
Lecture |
Topic 1: Introduction and Corporate Governance Discuss the corporate governance structure and its issues (role of boards, executive compensation, etc). Learning outcomes: L01 |
Week 2 |
Tutorial |
Tutorial 1: Corporate Governance Learning outcomes: L01 |
Lecture |
Topic 2: Cost of Capital Discuss cost of equity and debt. Understand risk and return relationship. Learning outcomes: L01, L03 |
|
Week 3 |
Tutorial |
Tutorial 2: Cost of Capital Learning outcomes: L01, L03 |
Lecture |
Topic 3: Capital Structure I Discuss capital structure in a perfect world with no taxes and other financial market frictions. Learning outcomes: L02 |
|
Week 4 |
Tutorial |
Tutorial Royal Queensland Show Public Holiday - Wednesday 14 Aug 2024 - Check Blackboard for announcements about affected classes. |
Lecture |
No lecture Royal Queensland Show Public Holiday - Wednesday 14 Aug 2024 - Check Blackboard for announcements about affected classes. |
|
Week 5 |
Tutorial |
Tutorial 3: Capital Structure I Learning outcomes: L02 |
Lecture |
Topic 4: Capital Structure II Capital structure with taxes, distress costs and agency costs. Learning outcomes: L02, L03 |
|
Week 6 |
Tutorial |
Tutorial 4: Capital Structure II Learning outcomes: L02, L03 |
Lecture |
Topic 5: Capital Structure III Trade-off theory for optimal capital structure. Learning outcomes: L02 |
|
Week 7 |
Lecture |
In-Semester Exam In-Semester Exam. No tutorial or lecture this week. |
Week 8 |
Tutorial |
Tutorial 5: Capital Structure III Learning outcomes: L02 |
Lecture |
Topic 6: Payout Policy Discuss firm's payout policy and how market imperfections shape it. Learning outcomes: L02, L03 |
|
Week 9 |
Tutorial |
Tutorial 6: Payout Policy Learning outcomes: L02, L03 |
Lecture |
Topic 7: Financial Options and Pricing Learning outcomes: L05 |
|
Mid Sem break |
No student involvement (Breaks, information) |
In-Semester Break |
Week 10 |
Tutorial |
Tutorial 7: Financial Options Learning outcomes: L05 |
Lecture |
Topic 8: Real Options Identify and value real options. Learning outcomes: L05 |
|
Week 11 |
Tutorial |
Tutorial 8: Real Options No tutorial on Monday (October 7) due to King's birthday public holiday. Students are requested to attend any other tutorial sections during the week. Learning outcomes: L05 |
Lecture |
Topic 9: Raising New Capital Discuss equity capital issue process and its pricing mechanism. King's Birthday Public Holiday - Monday 7 Oct 2024 - Check Blackboard for announcements about affected classes. Learning outcomes: L03, L04 |
|
Week 12 |
Tutorial |
Tutorial 9: Raising New Capital Learning outcomes: L03 |
Lecture |
Topic 10: Mergers and Acquisitions Learning outcomes: L01, L04 |
|
Week 13 |
Tutorial |
Tutorial 10: Mergers and Acquisitions Learning outcomes: L01, L04 |
Lecture |
Revision Lecture Course revision Learning outcomes: L01, L02, L03, L04, L05 |
Policies and procedures
University policies and procedures apply to all aspects of student life. As a UQ student, you must comply with University-wide and program-specific requirements, including the:
- Student Code of Conduct Policy
- Student Integrity and Misconduct Policy and Procedure
- Assessment Procedure
- Examinations Procedure
- Reasonable Adjustments - Students Policy and Procedure
Learn more about UQ policies on my.UQ and the Policy and Procedure Library.