Course Title: Corporate Finance

Part A: Course Overview

Course Title: Corporate Finance

Credit Points: 12

Course Code	Campus	Career	School	Learning Mode	Teaching Period(s)
BAFI1059	City Campus	Postgraduate	625H Economics, Finance & Marketing	Face-to-Face	Sem 1 2006, Sem 2 2006, Sem 1 2007, Sem 2 2007, Sem 1 2008, Sem 2 2008, Sem 1 2009, Sem 2 2009, Sem 1 2010
BAFI1063	Singapore Inst of Management	Postgraduate	625H Economics, Finance & Marketing	Face-to-Face	Offsh 3 08, Offsh 3 09

Course Coordinator: Assoc Prof Amalia Di Iorio

Course Coordinator Phone: +61 3 9925 5900

Course Coordinator Email:amalia.diiorio@rmit.edu.au

Course Coordinator Location: 108.12.47

Pre-requisite Courses and Assumed Knowledge and Capabilities

None

Course Description

This course introduces the student to the fundamental principles of financial decision-making. The course will develop the basic framework for decision-making and students will investigate the theories of corporate finance, the analytical techniques used to value assets, and various aspects of the financial markets. In this context, this course will explore the relationship between the investment and financing decisions with particular emphasis on the valuation of stocks and bonds, capital budgeting, portfolio diversification and capital structure.
This course includes the following topic areas –

• Introduction to Financial Decision-Making
• The Time Value of Money
• Valuation of Stocks and Bonds
• Capital Budgeting
• Risk and Return – Portfolio Diversification and CAPM
• Capital Structure and the Cost of Capital
• Dividend Policy

Objectives/Learning Outcomes/Capability Development

This course will

(i) provide you a solid background in basic financial concepts and tools, including opportunity cost of capital, factors affecting the valuation of bonds and stocks, the relationship between risk and return, the diversification of risk, the efficient market hypothesis, capital budgeting and dividend policy;
(ii) assist you to develop a way of thinking about financial issues and the theory of modern finance;
(iii) assist you to develop an understanding of the assumptions that underlie financial models;
(iv) assist you to develop the skills required to use the basic valuation model in finance and understand its application in valuing securities and projects.
A basic understanding of the fundamental concepts and principles of modern finance is essential in all areas of business. Therefore although this course will provide a solid foundation for further study in finance, it is very useful course for students who do not wish to pursue more advanced courses in this discipline area.

Overview of Learning Activities

To achieve the course objectives requires you to participate in various learning activities. These activities comprise the following:
• attendance at and note-taking during scheduled lectures
• active participation in lectures
• reading of and note-taking from prescribed and recommended text books and other references
• optional consultation with academic staff
• complete assessment tasks

Overview of Learning Resources

Prescribed Textbook and supplementary readings

Overview of Assessment

The assessment tasks you are required to complete are a mid-semester test and a Final Examination (3 hour paper). In order to achieve a pass in this subject, you are required to achieve an overall mark of 50%