MA514 - Business Finance
Credit Points: 15 credit points
Workload: 36 hours
Prerequisite: MA508 Business Statistics
Aims & Objectives
This is a Year 1, Core Unit in the Master of Professional Accounting. For Course Learning Outcomes and further information relating to Master of Professional Accounting program please visit our website: http://www.mit.edu.au/study-with-us/programs/master-professional-accounting.
The unit will give students a fundamental understanding of the principles and concepts of business finance. It examines the techniques that financial managers use in decision-making, particularly in the key areas of the capital budgeting decision (capital investment analysis) and the financing decision (how activities and projects will be funded). It also has an emphasis on share and bond valuations as well as cost of capital, capital structure and the value of the firm.
This unit will cover the following topics:
- Introduction of financial management
- Valuation of cash flow and time
- Valuation of future; and valuation of shares and bonds
- Risk and Return
- Capital budgeting
- Long-term financing
- Short-term financing
- International aspect of financial management
- Exam revision
Course Learning Outcomes
The Course learning outcomes applicable to this unit are listed on the Melbourne Institute of Technology’s website: https://www.mit.edu.au/study-with-us/programs/master-professional-accounting.
Unit Learning Outcome
At the completion of this Unit students will be able to:
a. Describe and discuss the role of corporate finance.
b. Demonstrate knowledge of time value of money (TVM) concepts and techniques, capital market theories, and methods of financing businesses, and critically apply the concepts to evaluate economic and investment decisions, including the valuation of bonds and shares and the assessment of capital budgeting decisions.
c. Demonstrate strong conceptual corporate finance knowledge to analyse and interpret advances in theory for professional practice.
d. Evaluate and synthesize the key cornerstone elements of finance knowledge and creatively apply that knowledge to real problems in business and in personal financial decision-making.
e. Communicate relevant high level finance knowledge with other professionals.
|Assessment Task||Due Date||A||B||Unit Learning Outcomes|
|1. Contribution and Participation||Weeks 1-12||-||6%||a-e|
|2. Formative Assessment||Week 3||-||4%||a|
|3. Assignment [Individual]||Week 6||20%||-||c,e|
|4. Assignment [Group]||Week 10||20%||-||b,c,e|
|5. Case Study Analysis [Individual] (3 hours)||TBA||-||50%||a-e|
Task Type: Type A: unsupervised, Type B: supervised.
Contribution and Participation (6%)
This unit has class participation as an assessment. The assessment task and marking rubric will follow the Guidelines on Assessing Class Participation (https://www.mit.edu.au/about-us/governance/institute-rules-policies-and-plans/policies-procedures-and-guidelines/Guidelines_on_Assessing_Class_Participation). Further details will be provided in the assessment specification on the type of assessment tasks and the marking rubrics.
NOTE: All School of Business units 3-hour workshops Flipped Classroom Mode.
Textbook and Reference Materials
Note: Students are required to purchase the prescribed textbook and have it available each week in class.
Copies of the textbook are available in the MIT Library.
Prescribed Text Book
- Ross, S. A., Trayler, R., Koh, C., Hambusch, G., Westerfield, R. W. and Jordan, B. D. (2019.). Essentials of Corporate Finance (5th Edition). NSW, McGraw-Hill Education.
Other recommended texts
- Parrino, R., Au Yong, H. H., Morkel-Kingsbury, N., James, J., Mazzola, P., James Murray, J., Smales, L., Wei, X. (2020). Fundamentals of Corporate Finance (4th edition). Wiley, Milton Qld 4064.
- Parrino, R., Kidwell, D. S.,AuYong, H. H., Dempsey, M., Morkel-Kingbury, N., Ekanayake, S., James, J. and Murray, J. (2018.). Business Finance (1st edition). Wiley, Brisbane, Australia.
- Parrino, R., AuYong, H. H., Dempsey, M., Morkel-Kingbury, N., Ekanayake, S., James, J. and Murray, J. (2018.). Fundamentals of Corporate Finance (3rd edition). Wiley, Brisbane, Australia.
- Pierson, G., Brown, R., Easton, S., Howard, P. and Pinder, S. (2015.). Business Finance (12th edition). McGraw-Hill.
- Titman, S., Martin, T., Keown, A. J., Martin, J.D. (2018.) Financial Management: Principles and Applications (8th edition). Pearson Education, Sydney.
- Adrian, T., Crump, R. K., & Vogt, E. (2019). Nonlinearity and Flight‐to‐Safety in the Risk‐Return Trade‐Off for Stocks and Bonds. The Journal of Finance, 74(4), 1931-1973.
- Cao, M. D., Faseruk, A., and Hossain, A. (2018). Risk Measurement-Value at Risk (VaR) Versus Conditional Value at Risk (CVaR): A Teaching Note. Journal of Accounting & Finance, Vol. 18 (6): 86-93.
- Fletcher, E. S., Rose, J. T. and Mulford, C. W. (2018). Estimating Temporary and Permanent Working Capital to Discern a Firm's Asset Financing Strategy, Journal of Accounting & Finance, 18 (6):94-104.
- Jensen, M. C., Black, F. and Scholes, M. S. (1972) The Capital Asset Pricing Model: Some Empirical Tests, in STUDIES IN THE THEORY OF CAPITAL MARKETS, Praeger Publishers Inc., 1972.
- Pohl, W., Schmedders, K. and Wilms, O. (2018). Higher Order Effects in Asset Pricing Models with Long-Run Risks. The Journal of Finance, Vol. LXXIII, No. 3: 546-591.
- Smith, J. M., Driver, R. and Matthews, W. (2018). The Real Options Lattice: An Alternative to Discounted Cash Flow, Journal of Accounting & Finance, Vol. 18 (7): 119-129.
Recommended Internet sources
- The Australian Business Briefing: http://www.theaustralian.com.au/business.
- ABC Business News: http://www.abc.net.au/news/business/
- Bloomberg Australia and NZ: http://www.bloomberg.com/news/australia-newzealand/
- Reuters: http://www.reuters.com/finance
- Bloomberg: https://www.bloomberg.com/markets
- The Economist- Business and Finance: http://www.economist.com/business-finance
Share Market Data
- Australian Securities Exchange: http://www.asx.com.au/
- Yahoo Finance Australia: http://au.finance.yahoo.com/
- Quote.com: http://au.quote.com/home_au.aspx
Check the unit Moodle page for additional recommended readings throughout the trimester.
The Referencing style for this unit is APA: See the MIT Library Referencing webpage: https://library.mit.edu.au/referencing/APA and the Unit Moodle page for additional referencing support material and weblinks
MIT is committed to ensure the course is current, practical and relevant so that graduates are “work ready” and equipped for life-long learning. In order to accomplish this, the MIT Graduate Attributes identify the required knowledge, skills and attributes that prepare students for the industry.
The level to which Graduate Attributes covered in this unit are as follows:
|Ability to communicate||Independent and Lifelong Learning||Ethics||Analytical and Problem Solving||Cultural and Global Awareness||Team work||Specialist knowledge of a field of study|
|Levels of attainment||Extent covered|
|The attribute is covered by theory and practice, and addressed by assessed activities in which the students always play an active role, e.g. workshops, lab submissions, assignments, demonstrations, tests, examinations.|
|The attribute is covered by theory or practice, and addressed by assessed activities in which the students mostly play an active role, e.g. discussions, reading, intepreting documents, tests, examinations.|
|The attribute is discussed in theory or practice; it is addressed by assessed activities in which the students may play an active role, e.g. lectures and discussions, reading, interpretation, workshops, presentations.|
|The attribute is presented as a side issue in theory or practice; it is not specifically assessed, but it is addressed by activities such as lectures or tutorials.|
|The attribute is not considered, there is no theory or practice or activities associated with this attribute.|