An introduction to the analytical approaches corporate managers use in making financial decisions to maximise firm value. The theory and application of fundamental concepts of time value of money, the relationship between risk and return (i.e., CAPM), portfolio theory of investment (i.e., diversification), and capital structure are examined in detail. You will apply these concepts and assorted financial tools to value stocks and bonds, estimate the cost of capital and implement the discounted cash flow technique to make capital budgeting decisions. You will also demonstrate competence with Bloomberg Market Concepts.
|Academic unit:||Bond Business School|
|Subject title:||Managerial Finance|
Delivery & attendance
|Attendance and learning activities:||Attendance at all class sessions is expected. Students are expected to notify the instructor of any absences with as much advance notice as possible.|
|Prescribed resources:|| |
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Assurance of learning
Assurance of Learning means that universities take responsibility for creating, monitoring and updating curriculum, teaching and assessment so that students graduate with the knowledge, skills and attributes they need for employability and/or further study.
At Bond University, we carefully develop subject and program outcomes to ensure that student learning in each subject contributes to the whole student experience. Students are encouraged to carefully read and consider subject and program outcomes as combined elements.
Program Learning Outcomes (PLOs)
Program Learning Outcomes provide a broad and measurable set of standards that incorporate a range of knowledge and skills that will be achieved on completion of the program. If you are undertaking this subject as part of a degree program, you should refer to the relevant degree program outcomes and graduate attributes as they relate to this subject.
Subject Learning Outcomes (SLOs)
On successful completion of this subject the learner will be able to:
- Explain the key issues faced by corporate financial managers and the analytical approaches required to resolve these issues to maximise firm value.
- Apply time value of money concepts using spreadsheets, formulae and financial calculators to value bonds and common stocks.
- Explain the risk/return trade-off using examples from Portfolio Theory, the Capital Asset Pricing Model and the relationship between a firm and the capital markets.
- Demonstrate competence using Bloomberg Market Concepts.
- Apply concepts of cash flow analysis, evaluation techniques and the cost of capital to make a sound capital budgeting decision.
- Demonstrate the ability to produce a written report that demonstrates higher order understanding of key concepts in managerial finance.
|In-Class Quiz - Individual||Time Value of Money Concept Test (in tutorial) consisting of multiple choice and short answer with calculations.||10%||Week 4||2.|
|Case Analysis||In-depth case analysis report requiring you to apply tools and theories and make recommendations.||20%||Week 9||5, 6.|
|Online Quiz||Bloomberg Market Concepts (BMC) quiz covering four modules — Economics, Currencies, Fixed Income and Equities.||10%||Week 12||4.|
|Paper-based Examination (Closed)||Final Examination consisting of short answer with calculations and applied quantitative analysis of managerial problems requiring recommendations||35%||Final Examination Period||1, 2, 3.|
|Paper-based Examination (Closed)||Mid-semester Examination (in lecture) consisting of short answer with calculations and applied quantitative analysis of managerial problems requiring recommendations.||25%||Week 7 (Mid-Semester Examination Period)||1, 2, 3.|
- * Assessment timing is indicative of the week that the assessment is due or begins (where conducted over multiple weeks), and is based on the standard University academic calendar
- C = Students must reach a level of competency to successfully complete this assessment.
|High Distinction||85-100||Outstanding or exemplary performance in the following areas: interpretative ability; intellectual initiative in response to questions; mastery of the skills required by the subject, general levels of knowledge and analytic ability or clear thinking.|
|Distinction||75-84||Usually awarded to students whose performance goes well beyond the minimum requirements set for tasks required in assessment, and who perform well in most of the above areas.|
|Credit||65-74||Usually awarded to students whose performance is considered to go beyond the minimum requirements for work set for assessment. Assessable work is typically characterised by a strong performance in some of the capacities listed above.|
|Pass||50-64||Usually awarded to students whose performance meets the requirements set for work provided for assessment.|
|Fail||0-49||Usually awarded to students whose performance is not considered to meet the minimum requirements set for particular tasks. The fail grade may be a result of insufficient preparation, of inattention to assignment guidelines or lack of academic ability. A frequent cause of failure is lack of attention to subject or assignment guidelines.|
For the purposes of quality assurance, Bond University conducts an evaluation process to measure and document student assessment as evidence of the extent to which program and subject learning outcomes are achieved. Some examples of student work will be retained for potential research and quality auditing purposes only. Any student work used will be treated confidentially and no student grades will be affected.
Students must check the [email protected] subject site for detailed assessment information and submission procedures.
Policy on late submission and extensions
A late penalty will be applied to all overdue assessment tasks unless an extension is granted by the subject coordinator. The standard penalty will be 10% of marks awarded to that assessment per day late with no assessment to be accepted seven days after the due date. Where a student is granted an extension, the penalty of 10% per day late starts from the new due date.
Policy on plagiarism
University’s Academic Integrity Policy defines plagiarism as the act of misrepresenting as one’s own original work: another’s ideas, interpretations, words, or creative works; and/or one’s own previous ideas, interpretations, words, or creative work without acknowledging that it was used previously (i.e., self-plagiarism). The University considers the act of plagiarising to be a breach of the Student Conduct Code and, therefore, subject to the Discipline Regulations which provide for a range of penalties including the reduction of marks or grades, fines and suspension from the University.
Feedback on assessment
Feedback on assessment will be provided to students within two weeks of the assessment submission due date, as per the Assessment Policy.
If you have a disability, illness, injury or health condition that impacts your capacity to complete studies, exams or assessment tasks, it is important you let us know your special requirements, early in the semester. Students will need to make an application for support and submit it with recent, comprehensive documentation at an appointment with a Disability Officer. Students with a disability are encouraged to contact the Disability Office at the earliest possible time, to meet staff and learn about the services available to meet your specific needs. Please note that late notification or failure to disclose your disability can be to your disadvantage as the University cannot guarantee support under such circumstances.
Additional subject information
As part of the requirements for Business School quality accreditation, the Bond Business School employs an evaluation process to measure and document student assessment as evidence of the extent to which program and subject learning outcomes are achieved. Some examples of student work will be retained for potential research and quality auditing purposes only. Any student work used will be treated confidentially and no student grades will be affected.
Introduces the role of time value in finance, the use of computational tools, and the basic patterns of cash flow. You will calculate the future value and the present value for single amounts and for cash flow streams and understand the effect of compounding frequency on future value.
Introduces the meaning and fundamentals of risk, return, and risk preferences. You will learn procedures for measuring the risk of a single asset and a portfolio, in terms of correlation and diversification. You will explore the capital asset pricing model (CAPM) and its relationship to the security market line (SML).
Introduces the general features and rights of bonds and stocks and the differences between debt and equity. You will apply the basic valuation model to bonds, preferred stock and common stock. Consideration will be given to the impact of required return and time to maturity on bond values and the growth rate on stock values when using the dividend discount model.
Introduces the rationale for capital budgeting and steps in the capital budgeting process. You will determine the relevant cash flows to make decisions for acquiring new facilities, new products and expanding existing lines. Consideration will be given to the importance of risk on the capital budgeting process.
Introduces the key assumptions that underlie cost of capital and the specific sources of capital it includes. You will apply these fundamentals to calculate the cost of debt and equity and apply alternative weighting schemes to determine a firm’s weighted average cost of capital (WACC). You will explore how the WACC can be used to make corporate financing and investment decisions.