FNCE 20005
Corporate Financial Decision Making
SUBJECT GUIDE
Summer Term 2022
Prepared by
Hoonsuk Park (hoonsuk.park@unimelb.edu.au)
Department of Finance
Faculty of Business and Economics
Subject Outline
Introduction
Welcome to FNCE 20005 Corporate Financial Decision Making. This subject is an extension
of the theory and practice of finance covered in Principles of Finance. Greater details of
subject aims, objectives and topics to be covered are provided in the next few pages.
Subject Overview and Aims
This subject extends the analysis of capital budgeting, capital structure, dividend policy and
corporate risk management to the treatment in Principles of Finance. Topics include the
effect of the dividend imputation system of taxation on dividend policy, capital structure and
capital budgeting; a comprehensive analysis of corporate acquisitions and restructuring; a
detailed examination of alternative funding mechanisms including leases; and a discussion
of issues of interest in Australian corporate finance.
Learning Outcomes
Learning Outcomes and Generic Skills
To view the subject objectives and the generic skills you will develop through successful
completion of this subject, please see the University Handbook:
https://handbook.unimelb.edu.au/view/current/FNCE20005
Eligibility and Requirements
To view the eligibility and requirements, including prerequisites, corequisites, recommended
background knowledge and core participation requirements for this subject, please see the
University Handbook:
https://handbook.unimelb.edu.au/2022/subjects/fnce20005/eligibility-and-requirements
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Academic Staff Contact Details
Subject Coordinator Contact Details
Name: Hoonsuk Park
Email: hoonsuk.park@unimelb.edu.au
Consultation Hours: To be announced
Email Protocol
Please note that we are only able to respond to student emails coming from a University
email address. Please do not use personal email addresses such as Yahoo, Hotmail or even
business email addresses. Emails from non-University email addresses may be filtered by
the University’s spam filter, which means that we may not receive your email. All
correspondence relating to this subject will only be sent to your University email address.
Note that you must first activate your University email address before you can send or
receive emails at that address. You can activate your email account at this link:
http://accounts.unimelb.edu.au/.
While academic staff endeavor to address queries received via email, it is more appropriate
to resolve substantive questions during lectures and tutorials and/or during normal
consultation hours. With this in mind, we encourage students to attend all lectures and
tutorials and to familiarise themselves with the consultation hours offered by the lecturers and
tutors in this subject.
Lectures
Lecture Recordings and Times
The lectures will be pre-recorded. The Lecture slides and the lecture recording will be
posted by 10:00 am each Wednesday.
Lecture Schedule
Note that the lecture schedule and content may be varied during the semester.
Week
Date Commencing
Topic
Further Reading
1
Jan 3
Introduction and options /
Equity / Debt and Leases
Chapter 18 / Chapter 9 /
Chapters 9, 10.1-10.5 and
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2
Jan 10
Issues with WACC and
capital structure policy /
Payout policy
Chapters 12, 13 and 14.6 /
Chapter 11
3
Jan 17
Mid-semester test
3
4
Jan 24
Advanced topics in capital
budgeting: Sensitivity,
break-even and decision
tree analyses / Corporate
Takeovers & Restructuring
- Part 1 / Part 2
Chapters 6.6-6.7 / Chapter
19
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Jan 31
Corporate Takeovers &
Restructuring – Part 3 /
Part 4 & Real Options /
Risk Management
Chapter 18, 19 / Reading
provided
Lecture Slides
Lecture slides and the lecture recording will be posted by 10:00 am each Wednesday.
Tutorials
You are expected to attend a three-hour tutorial every week, either in-person or via Zoom.
The tutorial schedule will be posted on Canvas. Please note that there will no tutorials in
Week 3.
Private Tutoring Services
The Faculty has become increasingly concerned about the existence of a number of private
tutoring services operating in Melbourne that heavily target University of Melbourne students
enrolled in FBE subjects.
Students are urged to show caution and exercise their judgement if they are considering
using any of these services, and to please take note of the following:
Any claim by any of these businesses that they have a “special” or “collaborative” or
“partnership” style relationship with the University or Faculty is false and misleading.
Any claim by a private tutoring service that they are in possession of, or can supply you with,
forthcoming University exam or assignment questions or “insider” or “exclusive” information
is also false and misleading.
The University has no relationship whatsoever with any of these services and takes these
claims very seriously as they threaten to damage the University’s reputation and undermine
its independence.
It is also not appropriate for students to provide course materials (including University
curricula, reading materials, exam and assignment questions and answers) to operators of
these businesses for the purposes of allowing them to conduct commercial tutoring
activities. Doing so may amount to misconduct and will be taken seriously. Those materials
contain intellectual property owned or controlled by the University.
We encourage you to bring to the attention of Faculty staff any behaviour or activity that is
not aligned with University expectations or policy as outlined above.
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Assessment
Assessment Overview
Your assessment for this subject comprises the following:
Assessment Task
Individual or Group
Due
Weighting
Individual homework assignment
Individual
Released
Monday 31
January –
closing 4
February at 5:00
pm Melbourne
time
15%
Mid-semester test
Individual
Wednesday 19
January
between 4:45
pm to 8:45 pm
Melbourne time
25%
End-of-semester exam
Individual
Assessment
period
60%
Individual homework assignment: An individual homework assignment will contribute 15% to
your overall grade. Note that there are no extensions possible for this assignment as it is
implemented online with a sufficient lead time to complete it. Further information will be provided
via Canvas.
Mid-semester test: The mid-semester test will contribute 25% to your overall grade. It will be of
60 minutes of duration and will be comprised of multiple-choice questions and must be
submitted within a four-hour window on Wednesday 19 January between 4:45 pm and 8:45 pm
Melbourne time. Further information will be provided via Canvas.
End-of-semester exam: The final end-of-semester exam will contribute 60% to your overall
grade. It will be 120-minute duration. Further information will be provided via Canvas.
It is important to note that the University requires that you are available for the entire
examination period. Please see the University’s principal dates website for full annual calendar.
Special exams will not be provided in cases of absence during the examination period unless
the absence is due to serious illness or other extenuating circumstances and a special
consideration application has been submitted and approved. Note that a Faculty panel
considers all special consideration applications and lecturers have no input in this process.
Additional information on special consideration applications appears below.
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Penalties for Late Submission
In order to ensure equality for all students, assignments and examinations (where relevant)
must be submitted by specified deadlines. Late submissions will attract the following
marking penalties (unless approval for late submission has been granted):
Examinations: Late submissions will attract a 10% penalty (of the total maximum mark for
the exam) if submitted after the scheduled completion time (for instance, an exam scheduled
at 3:00pm with 180 minutes writing time + 15 minutes reading time will have a completion
time of 6:15pm). Submissions 30 minutes after the completion time will not be marked.
This exam requires file uploads; these files may take some time to complete their upload in
peak exam times. Students are advised to allow sufficient time to upload and check files
prior to the scheduled completion time. File uploads must be fully completed by the
examination completion time.
Students who were prevented from submitting due to technical difficulties will need to apply
for technical consideration with supporting documentation.
Subject Resources
Prescribed References
Peirson G, Brown R, Easton S, Howard, P and S Pinder, 2015, Business Finance,
12thedition, McGraw-Hill.
https://ebookcentral.proquest.com/lib/unimelb/reader.action?docID=5471317
Supplementary Readings
Other readings will be provided on the LMS.
Academic Integrity
Academic Honesty
The University maintains high academic standards in its courses and subjects and expects
students to conduct themselves in a manner which is fair, honest and consistent with the
principles of academic integrity, particularly when undertaking assessment and research.
http://academicintegrity.unimelb.edu.au/
Referencing
Each source used for a written piece of assessment must be referenced. This is to
acknowledge that your material is not based entirely on your own ideas, but is based, in
part, on the ideas, information, and evidence of others. This is desirable as you are
attending University in order to learn from others.
You will be required to use the APA system or Harvard System of referencing. The library
has prepared a website to help students correctly reference:
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http://www.library.unimelb.edu.au/recite
It is important that all material you present for assessment is referenced correctly. Material
that has not been referenced correctly may be considered to be plagiarised, and as such
may be penalised. We will also look for evidence that material included in the bibliography
has been used in the assignment.
The Academic Skills Unit has produced resources to assist students with referencing
https://services.unimelb.edu.au/academicskills/undergrads/top_resources
The Library also provides advice on referencing: http://library.unimelb.edu.au/cite
University Services
Timetable
MyTimetable is a class timetabling system that creates individual timetables for students
based on submitted class preferences, ensuring everyone has an equitable opportunity of
getting their preferred class timetable. You will use this system to create your class timetable
prior to each study period.
By following a preference-based model, students who have other commitments, such as
employment or carer responsibilities, or who are returning or living overseas during the
timetabling period, aren’t disadvantaged by their limited availability. When allocating class
timetables, MyTimetable also takes into consideration factors such as class size limits and
potential clashes to ensure all students are equally accommodated. Further information is
available on the web at https://students.unimelb.edu.au/admin/class-timetable
Stop 1: Connecting Students and Services
Stop 1 is here to provide you with a range of support services throughout your university
degree, from help with enrolment, administration and wellbeing to advice on building your
skills and experiences. https://students.unimelb.edu.au/stop1
Academic Skills
Academic Skills offers a range of workshops and resources to help you with study skills
including researching, writing and referencing, presentation skills and preparing for exams.
Visit their website via http://services.unimelb.edu.au/academicskills.
Service Finder
The University of Melbourne offers one of the most comprehensive student support
networks in Australia. Use this site to locate a wide range of services
http://services.unimelb.edu.au/finder
Student Counselling
Students attend counselling to talk about personal, emotional, or mental health issues which
might be affecting their study and life. The University’s Counselling and Psychological
Services (CAPS) provides free, confidential, short-term professional counselling to currently
enrolled students and staff. https://services.unimelb.edu.au/counsel/individual
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Student Equity and Disability Support
Student Equity and Disability Support provides services for students who need ongoing
support with their studies. They understand that adjustments to learning and assessment
are sometimes required to allow all students to reach their full potential. Learn more about
the services provided, how to find support and how to register for assistance.
http://services.unimelb.edu.au/student-equity
University of Melbourne Library Services
As well as holding an extensive collection of books, ebooks, digital media and periodicals,
library staff provide research guidance and support for students.
http://library.unimelb.edu.au/
These Business and Economics Library Guides have been designed specifically for Faculty
of Business and Economics staff and students.
http://unimelb.libguides.com/sb.php?subject_id=80310
Policy
Alternative Exam Arrangements (AEA)
The definition of and eligibility requirements for alternative exam arrangements (AEA) can
be found via http://students.unimelb.edu.au/admin/alternate .
Mid-semester examinations/tests are organised by the Department of Finance. If you wish to
request alternative arrangements, email fbe-financeaeas@unimelb.edu.au with a copy of
your approved Academic Adjustment Plan.
Assessment and Results Policy
The University’s assessment policy provides a framework for the design, delivery and
implementation of assessment of students in award and non-award courses and subjects.
Assessment is designed to contribute to high quality learning by students, and to allow for
quality assurance and the maintenance of high academic standards.
https://policy.unimelb.edu.au/MPF1326
Exam Policy
The University requires that you are available for the entire examination period. Please see
the University's Principal Dates via https://www.unimelb.edu.au/dates#2022 for the full
annual calendar. Supplementary exams will not be provided in cases of absence during the
examination period unless the absence is due to serious illness or other serious
circumstances and a Special Consideration application is submitted and approved.
Information on Calculators in Examinations
Effective from 1 January 2017, the approved calculator for all subjects is the Casio FX82
(any suffix). No equivalent models of calculators will be permitted in exams.
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You are required to purchase your own calculator and are responsible for ensuring your
calculator is in good working order with fresh batteries.
Plagiarism and Collusion
Plagiarism (failure to cite your sources correctly and completely) and collusion (unauthorised
collaboration with another person to prepare an assessment task) are considered academic
misconduct and attract severe penalties. More information is available on the University’s
Academic Integrity website via http://go.unimelb.edu.au/rha6.
Special Consideration
As a student, you may experience extraordinary or unusual circumstances, or ongoing
circumstances that adversely affect your academic performance. The University has policies
in place to support students who are experiencing academic disadvantage. For more
information, visit http://students.unimelb.edu.au/admin/special.
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