AFX9540 - Business finance

Leader: Dr Balasingham Balachandran

Offered

Caulfield First semester 2007 (Day)
Caulfield First semester 2007 (Evening)
Caulfield Second semester 2007 (Day)
Caulfield Second semester 2007 (Evening)
Caulfield Summer semester A 2007 (On-campus)
Hong Kong Summer semester A 2007 (Off-campus)

Synopsis

This unit covers corporate finance concepts and theories at an introductory level. Students will be expected to be able to master basic calculations involving share and bond valuations, NPV and IRR,
company cost of capital, etc. and to use them in determining whether investment projects should proceed as well as the value of companies.
They will also expected to be able to interpret the results and to discuss basic issues and theories appropriate to an introductory level unit.

Objectives

The learning goals associated with this unit are to:

• demonstrate a basic understanding of the theory of business finance;
• be familiar with the practical aspects of capital budgeting and be competent in applying the fundamental principles of financial mathematics to investment decisions;
• be able to explain and have a basic understanding of portfolio theory and how it can be extended to pricing risky assets;
• know how to choose and compute an appropriate cost of capital estimate for investment appraisal purposes;
• have a basic understanding of the theory and issues involved in efficient markets, dividend policy and capital structure.

Assessment

Class exercises: 20%
Examination (3 hours): 80%

Contact hours

3 hours per week

Co-requisites

AFX9500, AFX9510

Prohibitions

AFF9250, AFF9641, AFX9641