FINA510-17T (HAM)

Financial Theory and Corporate Policy

15 Points

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Waikato Management School
Te Raupapa
Department of Finance

Staff

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Convenor(s)

Stuart Locke

Stuart Locke
4756
MSB.2.34
Tuesday 1200-1400
stuart.locke@waikato.ac.nz

Lecturer(s)

Administrator(s)

: maxine.hayward@waikato.ac.nz

Placement Coordinator(s)

Tutor(s)

: thao.vcu@gmail.com

Student Representative(s)

Lab Technician(s)

Librarian(s)

: clive.wilkinson@waikato.ac.nz

You can contact staff by:

  • Calling +64 7 838 4466 select option 1, then enter the extension.
  • Extensions starting with 4, 5 or 9 can also be direct dialled:
    • For extensions starting with 4: dial +64 7 838 extension.
    • For extensions starting with 5: dial +64 7 858 extension.
    • For extensions starting with 9: dial +64 7 837 extension.
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Paper Description

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A first paper in the principles and practice of corporate finance. Building upon the concepts of net present value and time value of money, the paper examines corporate capital budgeting, capital structure and dividend policy.
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Paper Structure

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Activities

1 :Attend lectures and tutorials
2 :Read teaching materials
3 :Complete assignments
4 :Prepare for and sit test
5 :Participate in class discussion

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Learning Outcomes

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Students who successfully complete the course should be able to:

  • Calculate financial ratios from financial statements. Students able to determine a firm’s cash flows and know where to find the information to calculate cash flows. (LO1)
    Linked to the following assessments:
  • Use the net present value and other investment criteria to make capital budgeting decision. (LO2)
    Students are able to understand how to determine the relevant cash flows for various types of proposed investments including how to compute depreciation expense for tax purposes.
    Linked to the following assessments:
  • Understand how to determine a firm’s cost of equity capital, cost of debt and overall cost of capital. (LO3)
    Students are able to explain the effects of financial leverage on cash flows and the cost of equity.
    Linked to the following assessments:
  • Analyse a firm's capital structure by using established financial models and identify the relationship between the value of the firm and the capital structure. (LO4)
    Linked to the following assessments:
  • Understand the dividend policy and identify the relationship between dividend policy and stock value. (LO5)
    Linked to the following assessments:
  • Understand how to compute the operating cycle and the cash cycle and identify the differences between a flexible short-term financing policy and a restrictive one. (LO6)
    Linked to the following assessments:
  • Explain and understand how exchange rates are quoted and what they mean. (LO7)
    Students are able to identify the difference between spot and forward rates.
    Linked to the following assessments:
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Assessment

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The Moodle Forum and how this works will be explained in Lecture 1.
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Assessment Components

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The internal assessment/exam ratio (as stated in the University Calendar) is 1:0. There is no final exam. The final exam makes up 0% of the overall mark.

The internal assessment/exam ratio (as stated in the University Calendar) is 1:0 or 0:0, whichever is more favourable for the student. The final exam makes up either 0% or 0% of the overall mark.

Component DescriptionDue Date TimePercentage of overall markSubmission MethodCompulsory
1. Individual Assignment 1
10 Nov 2017
4:00 PM
10
  • Online: Submit through Moodle
2. Individual Assignment 2
17 Nov 2017
4:00 PM
10
  • Online: Submit through Moodle
3. Individual Assignment 3
24 Nov 2017
4:00 PM
10
  • Online: Submit through Moodle
4. Individual Assignment 4
1 Dec 2017
4:00 PM
10
  • Online: Submit through Moodle
5. Group Assignment
8 Dec 2017
4:00 PM
20
  • Online: Submit through Moodle
6. Individual Comprehensive Test
13 Dec 2017
12:00 PM
40
  • Online: Submit through Moodle
Assessment Total:     100    
Failing to complete a compulsory assessment component of a paper will result in an IC grade
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Required and Recommended Readings

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Required Readings

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Prescribed Text Book:

Ross, S. A., Westerfield, R. W. and Jaffe, J. (2012), Corporate Finance, 11th Edition, USA: McGraw Hill.

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Recommended Readings

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Additional material will be made available through Announcements each week.
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Other Resources

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Panopto clips and videos of lectures will be made available each week.
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Online Support

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All the available resources about this paper will be available in Myweb. The online resources will be updated when necessary.
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Workload

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Attend lectures and tutorials (about 36 hours)

Read teaching materials (about 100 hours)

Prepare for assignments (about 44 hours)

Prepare for and sit the test (about 20 hours)

Note: The hours are approximate only.

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Linkages to Other Papers

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Prerequisite(s)

ECON204 and FINA201 or equivalent

Corequisite(s)

Equivalent(s)

Restriction(s)

FINA311

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