Finance (BUSA90094)

Graduate courseworkPoints: 12.5On Campus (Parkville)

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Overview

Availability
August
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This course is an introduction to the theory and practice of finance. The unifying theme of this subject is value:

  • How to value financial assets such as bonds and shares;
  • How to value (today) the (future) cash flows from the investment projects that firms undertake;
  • How to choose projects that increase the value of the firm to shareholders; and
  • How to finance those projects so that shareholder value is maximised.

 

Lectures and cases will introduce discounting and interest rate mathematics, principles of valuation, the weighted average cost of capital, and capital structure of firms. Along the way we will develop knowledge and intuition about the purpose of the different components of the financial systems (financial markets, financial intermediaries and financial instruments) and how those components create value

Intended learning outcomes

At the conclusion of the subject, students should understand the following concepts:



  • Time value of money and discounted cash flow approach to valuing projects, shares, bonds, and enterprises;
  • The basic functioning and purpose of capital markets (markets for stocks, bonds and other securities);
  • The effects of information asymmetry in the financial system;
  • Diversification and transfer of risk;
  • The capital structure problem and cash payout choices faced by corporations; and
  • How firms use weighted average cost of capital in choosing projects

Last updated: 4 March 2025