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  3. Corporate Financial Decision Making

Corporate Financial Decision Making (FNCE20005)

Undergraduate level 2Points: 12.5On Campus (Parkville)

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Overview

Availability
Summer Term
Semester 1
Semester 2
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This subject examines capital budgeting techniques, the capital structure decision, the distribution decision and corporate risk management at a more advanced level to that covered in FNCE10002 Principles of Finance. Topics include: the Modigliani-Miller theorems, the impact of taxes under a classical tax system, the impact of taxes under an imputation tax system, corporate acquisitions and restructuring, hybrid securities as a source of finance, techniques in raising capital.

Intended learning outcomes

On successful completion of this subject students should be able to:

  • Explain the different techniques used by firms to raise equity and debt capital.
  • Apply alternative capital budgeting techniques in the presence of taxes and differing project lives.
  • Discuss the impact of market imperfections on a firm’s capital structure decision.
  • Discuss the impact of market imperfections on a firm’s distribution decision.
  • Evaluate the advantages and disadvantages of hybrid securities as a source of finance.
  • Assess the economic consequences of corporate acquisition and restructuring activities.
  • Explain the option-theoretic interpretation of debt and equity.

Generic skills

On successful completion of this subject, students should have improved the following generic skills:

  • High level of development: oral communication; written communication; problem solving; interpretation and analysis; evaluation of data and other information.
  • Moderate level of development: collaborative learning; statistical reasoning; application of theory to practice; synthesis of data and other information; accessing data and other information from a range of sources.
  • Some level of development: critical thinking; use of computer software.

Last updated: 3 October 2024