FINAN305-21B (HAM)

Financial Management 2

15 Points

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Division of Management
School of Accounting, Finance and Economics

Staff

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Convenor(s)

Greg Hou

Greg Hou
9402
MSB.3.25
See Moodle
greg.hou@waikato.ac.nz

Lecturer(s)

Administrator(s)

: denise.martin@waikato.ac.nz

Placement/WIL Coordinator(s)

Tutor(s)

Student Representative(s)

Lab Technician(s)

Librarian(s)

: yilan.chen@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, 9 or 3 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.
    • For extensions starting with 3: dial +64 7 2620 + the last 3 digits of the extension e.g. 3123 = +64 7 262 0123.
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Paper Description

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As mentioned earlier, this paper builds on FINAN200. It examines a firm's Capital Structure Policy, Dividend and Payout Policy, Short-Term Financial Management. It also covers a few advanced topics like international corporate finance, behavioral finance and mergers and acquisitions.

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Paper Structure

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Main activities of this paper include:

1. On-campus and Zoom lectures

2. On-campus and Zoom tutorial activities

3. Individual assignment

4. Online tests

5. Group assignment

6. Student consultation



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Learning Outcomes

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Students who successfully complete the paper should be able to:

  • Illustrate the effects of leverage on firm value as well as risk and return using well-established optimal capital structure theories, and demonstrate the pros and cons among different capital structure policies (LO1).
    Linked to the following assessments:
  • Illustrate how dividend payout policy is important and how it works through to shareholders' interest. And students are able to estimate equity value using well-known dividend discount models. (LO2)
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  • Explain and summarize the essentials of short-term financial planning and issues relating to cash holdings, collection and disbursements (LO3).
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  • Describe how exchange rates are quoted and what they mean. Identify the difference between spot and forward rates. Interpret purchasing power parity and interest rate parity. (LO4)
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  • Illustrate biases, framing effects and heuristics relating to the effects of irrational behavior on corporate decision-making processes. And students are able to illustrate the relation between behavioral finance and market efficiency. (LO5)
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  • Identify and summarize the reasons for mergers. Describe and illustrate the methods to pay for an acquisition. Compute the gains from the merger or acquisition.(LO6)
    Linked to the following assessments:
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Assessment

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Internal Assessments are by the components as listed below. Note there is no examination for this paper.
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Assessment Components

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The internal assessment/exam ratio (as stated in the University Calendar) is 100:0. 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 100:0 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. Test 1
13 Aug 2021
6:00 PM
25
  • Online: Submit through Moodle
2. Individual Assignment
3 Sep 2021
5:00 PM
20
  • Online: Submit through Moodle
3. Test 2
8 Oct 2021
6:00 PM
25
  • Online: Submit through Moodle
4. Group Assignment
29 Oct 2021
5:00 PM
30
  • 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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There is no required textbook for this paper. But there is a textbook highly recommended : Ross, Westfield, and Jordan (2019). Fundamentals of Corporate Finance, 12th Edition, McGraw-Hill Education.
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Recommended Readings

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Reading List Link

For recommended textbook and readings and other useful resources, refer to the Waikato Reading List of this paper (https://rl.talis.com/3/waikato/lists/F0B63C8C-1B3D-0445-C7EB-DB9F2CF708A0.html?lang=en-US).

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Other Resources

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Refer to the Moodle for the detailed list of suggested readings.
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Online Support

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All the available resources about this paper will be available in Moodle. The online resources may be updated where necessary.

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Workload

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There are 150 learning hours for this paper. Most of the time is devoted to the following activities:

Attend lectures

Participate tutorial activities

Read teaching materials

Prepare for and sit the tests

Complete individual and group assignments

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Linkages to Other Papers

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This paper builds upon the knowledge of FINAN101; FINAN200 and has a relationship with the FINAN202 and FINAN203. Further, there is a significant interrelationship between finance and non-finance areas. First, finance and accounting are related since accounting information is needed for finance decision. Second, finance and economics are related because economic activity and policy affect finance decisions, and vice versa. Finance and management are related because the management decisions, such as setting salary, hiring new staff and paying bonus must be coordinated with finance. Finance and information system are related because finance decisions rely on information. Last but not least, there are four ps of marketing, product, price, place and promotion. Clearly, the price and promotion, e.g., advisement are related to finance.

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Prerequisite(s)

Prerequisite papers: FINA201 or FINAN200

Corequisite(s)

Equivalent(s)

Restriction(s)

Restricted papers: FINA311 and FINA510

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