BAFN602 - Corporate Finance

Year

Credit points

Campus offering

Prerequisites

Teaching organisation

150 hours over a twelve-week semester or equivalent study period

Unit rationale, description and aim

Corporate finance is an integral component in the business world. It deals with corporate finance deals and the capital structure of an organisation, including its funding and decisions that management takes to increase its value. Corporate finance also includes the tools and analysis used to prioritise and distribute financial resources. The ultimate purpose of corporate finance is to maximize the value of a business through planning and implementation of resources, while balancing risk and profitability. This unit provides students with an opportunity to develop an understanding of concepts, techniques, and practices that are needed to make financial decisions in a competitive business environment. Students will gain knowledge of the major issues in business finance and the nature of investment decisions will be addressed, including topics such as capital budgeting, portfolio theory and the capital asset pricing model. Having considered how businesses invest their funds, students will learn how those funds are financed and their costs, including the cost of capital, capital structure decisions, dividend policy and current assets management. The unit aims to equip students with theoretical and practical knowledge about contemporary financial management practices and tools utilised to make financial management decisions and to develop an understanding of the role of the finance function including the role of environmental, social and governance (ESG) on financing decisions.

Learning outcomes

To successfully complete this unit you will be able to demonstrate you have achieved the learning outcomes (LO) detailed in the below table.

Each outcome is informed by a number of graduate capabilities (GC) to ensure your work in this, and every unit, is part of a larger goal of graduating from ACU with the attributes of insight, empathy, imagination and impact.

Explore the graduate capabilities.

On successful completion of this unit, students should be able to:

LO1 - Appraise the various sources of financing to an organisation, including bank financing, bonds, equity, and treasury markets (GA4, GA5)

LO2 - Implement capital budgeting techniques demonstrating autonomous and group work skills (GA5, GA7)

LO3 - Determine the cost of capital and analyse the trade-offs between debt and equity in the capital structure (GA5, GA8)

LO4 - Evaluate financial and non-financial risks and apply risk management techniques to manage those risks in an organisation (GA2, GA5)

LO5 - Justify how organisations make investment and distribution decisions (GA5, GA6)

Graduate attributes

GA2 - recognise their responsibility to the common good, the environment and society 

GA4 - think critically and reflectively 

GA5 - demonstrate values, knowledge, skills and attitudes appropriate to the discipline and/or profession 

GA6 - solve problems in a variety of settings taking local and international perspectives into account

GA7 - work both autonomously and collaboratively 

GA8 - locate, organise, analyse, synthesise and evaluate information 

Content

Topics will include: 

• Goals and functions of financial management  
• Environment, social and governance (ESG) practices and finance decisions 
• Time value of money
• Cash flows and capital budgeting
• Dealing with uncertainty in decision making: Sensitivity and Scenario Analysis
• Bond and share valuation
• Risk and return trade-off and Capital Asset Pricing Model
• Income, asset-based, and market valuation approaches
• Capital and debt markets
• Capital structure
• Cost of capital
• Dividend policy  

Learning and teaching strategy and rationale

ACU’s learning and teaching policy focuses on learning outcomes for students. Our teaching aims to engage students as active participants in the learning process while acknowledging that all learning must involve a complex interplay of active and receptive processes, constructing meaning for oneself, and learning from others. ACU promotes and facilitates learning that is autonomous and self-motivated, is characterised by the individual taking satisfaction in the mastering of content and skills and is critical, looking beneath the surface level of information for the meaning and significance of what is being studied. 

The schedule of the workshop is designed in such a way that students can achieve intended learning outcomes sequentially. Teaching and learning activities will apply the experiential learning model, which encourages students to apply higher-order thinking. The unit ensures that learning activities involve real-world scenarios that assist with ‘real-world’ preparedness. The unit also uses a scaffolding technique that builds a student’s skills and prepares them for the next phase of the learning process.  

This unit is structured with required upfront preparation before workshops, and most students report that they spend an average of one hour preparing before the workshop and one or more hours after the workshop practicing and revising what was covered. The online learning platforms used in this unit provide multiple forms of preparatory and practice opportunities for students to prepare and revise. It is up to individual students to ensure that the out of the class study is adequate for the optimal learning outcomes and successes.

Mode of delivery: This unit is offered in different modes to cater to the learning needs and preferences of a range of participants and maximise effective participation for isolated and/or marginalised groups.  

Attendance Mode 

In a weekly attendance mode, students will require face-to-face attendance in specific physical location/s. Students will have face-to-face interactions with lecturer(s) to further their achievement of the learning outcomes. The online learning platforms used in this unit provide multiple forms of preparatory and practice opportunities for students to prepare and revise. 

Blended Mode 

In a blended mode, students will require intermittent face-to-face attendance determined by the School. Students will have face-to-face interactions with lecturer(s) to further their achievement of the learning outcomes. This unit is structured with required upfront preparation before workshops. The online learning platforms used in this unit provide multiple forms of preparatory and practice opportunities for students to prepare and revise. 

Online Mode 

In an Online mode, students are given the opportunity to attend facilitated synchronous online seminar classes with other students and participate in the construction and synthesis of knowledge, while developing their knowledge. Students are required to participate in a series of online interactive workshops which include activities, knowledge checks, discussion and interactive sessions. This approach allows flexibility for students and facilitates learning and participation for students with a preference for virtual learning. 

ACU Online

This unit uses an active learning approach to support students in the exploration of knowledge essential to the discipline. Students are provided with choice and variety in how they learn. Students are encouraged to contribute to asynchronous weekly discussions. Active learning opportunities provide students with opportunities to practice and apply their learning in situations similar to their future professions. Activities encourage students to bring their own examples to demonstrate understanding, application and engage constructively with their peers. Students receive regular and timely feedback on their learning, which includes information on their progress.

Assessment strategy and rationale

Assessments are used primarily to foster learning. ACU adopts a constructivist approach to learning that seeks alignment between the fundamental purpose of each unit, the learning outcomes, teaching and learning strategy, assessment and the learning environment. In order to pass this unit, students must demonstrate competence in all learning outcomes and achieve an aggregate mark of at least 50%. Using constructive alignment, the assessment tasks are designed for students to demonstrate their achievement of each learning outcome. 

For assessment, students will be required to evaluate data and information from a variety of sources and perspectives through research, integration, and analysis. Students will also need to apply critical thinking skills to identify and solve problems, inform judgments, make decisions, reach well-reasoned conclusions and make recommendations where applicable. Students are expected to communicate clearly and concisely when presenting, discussing, and reporting knowledge and ideas in formal and informal situations 

Each of these assessment pieces has been designed to empower students, lead to greater equity and deepen students’ skillsets by virtue of their design. They are assessments that are constructed to integrate the unit’s instruction and curriculum.

The overview of the assessment table is provided below under different delivery modes.

Overview of assessments

Attendance and Blended Mode:;

Online and ACU Online Mode:

Representative texts and references

Asquith, P & Weiss, LA 2019 Lessons in corporate finance: a case studies approach to financial tools, financial policies and valuation, 2nd edn, Wiley.

Berk, J, DeMarzo, P, Harford J, Ford, G & Mollica, V 2017, Fundamentals of corporate finance, Pearson Australia, 3rd edn, Frenchs Forest, NSW

Brealey, RA., Myers, SC & Allen, F 2020, Principles of Corporate Finance, 13th edn, McGraw-Hill.

DeMello, J 2017, Cases in finance, McGraw-Hill.

Graham, JR, Scott, BS, Adam, C & Gunasingham, B 2017 Corporate finance, Cengage Learning, 2nd Asia-Pacific edition, South Melbourne, VIC.

Hartman, L, DesJardins, JR & MacDonald, C 2017, Business ethics: decision making for personal integrity and social responsibility, 4thrd edn, McGraw-Hill.

Parrino, R, Yong HWA, Kingsbury, NM, James, J, Mazzola, J, Murray, J, Smales, L & Wei, X 2020, Fundamentals of corporate finance, 4th edn, John Wiley & Sons.

Ross, SA, Bianchi, Westerfield, RW & Jordan, BD, 2019, Fundamentals of corporate finance, 12th edn, McGraw-Hill Australia, Sydney. 

Titman, S., Martin, T., Keown, AJ and Martin, JD 2019, Financial management: principles and applications, 8th edn, Pearson Education.

Watson, D. & Head, A 2019, Corporate finance: principles and practice, 8th edn, Pearson Education, London, UK.