Teaching organisation3 hours per week for twelve weeks or equivalent.
Unit description and aim
Financial decision-making skills is a knowledge set that is essential, not only for finance professionals, but also for employees at any level. Everybody needs some basic finance knowledge for decisions involving borrowing money, making investments, comparing alternative financing alternatives, etc. This unit is designed to develop student’s understanding the finance function and help them make more informed financial management decisions using real-life business finance practices.
This unit provides students with an opportunity to develop an understanding of concepts, techniques, and practices that are needed to make financial decisions in a competitive business environment. Students will gain knowledge of the major issues in business finance and the models and theories that have been developed to help us understand how the financial world works. The focus of the unit is on common investment and financing decisions and related financial concepts such as the time-value of money and valuation of different types of securities. The nature of investment decisions will be addressed, including topics such as capital budgeting, portfolio theory and the capital asset pricing model. Having considered how businesses invest their funds, students will learn how those funds are financed and their costs, including the cost of capital, capital structure decisions, dividend policy and current assets management.
The unit aims to equip students with theoretical and practical knowledge about contemporary financial management practices and tools utilized to make financial management decisions. Another notable aim of the unit is to develop an understanding of the role of finance function in generating sustainable and socially responsible outcomes.
On successful completion of this unit, students should be able to:
LO1 - evaluate ethical issues in finance both domestically and globally, and examine how financial decisions can impact socially responsible outcomes (GA2, GA5)
LO2 - estimate the cost of capital and analyse the trade-offs between debt and equity in the capital structure. (GA5,GA8)
LO3 - examine viability of investment projects demonstrating autonomous and group work skills. (GA5, GA7)
LO4 - appraise the risk profile of a company and evaluate capital raising decisions. (GA4, GA5)
LO5 - evaluate dividend policy and working capital management of a company. (GA5, GA6)
GA2 - recognise their responsibility to the common good, the environment and society
GA3 - Apply ethical perspectives in informed decision making.
GA4 - think critically and reflectively
GA5 - demonstrate values, knowledge, skills and attitudes appropriate to the discipline and/or profession
GA6 - solve problems in a variety of settings taking local and international perspectives into account
GA7 - work both autonomously and collaboratively
GA8 - locate, organise, analyse, synthesise and evaluate information.
Topics will include:
- introduction to finance and financial management
- ethics and social implications of financial decisions
- time value of money
- bond and share valuation
- risk and return trade-off and Capital Asset Pricing Model
- cash flows and capital budgeting
- leverage and capital structure
- cost of capital
- dividend policy
- working capital management
- short and long-term financing
Learning and teaching strategy and rationale
The teaching and learning strategy is built on a “student-focused approach,” which can be described as “Level 3. Focus: what the student does” instead of a “teacher-focused approach,” ACU’s teaching policy focuses on learning outcomes for students. Our teaching aims to engage students as active participants in the learning process while acknowledging that all learning must involve a complex interplay of active and receptive processes, the constructing of meaning for oneself, and learning from others. ACU promotes and facilitates learning that is autonomous and self-motivated, is characterised by the individual taking satisfaction in the mastering of content and skills and is critical, looking beneath the surface level of information for the meaning and significance of what is being studied.
The schedule of the workshop is designed in such a way that students can achieve intended learning outcomes sequentially. Teaching and learning activities will apply the experiential learning model, which encourages students to apply higher order thinking. The unit ensures that learning activities involve real-world scenarios that in turn assist with ‘real-world’ preparedness. The unit also uses a scaffolding technique that builds a student’s skills and prepares them for the next phase of the learning process.
This unit is taught in a flipped classroom format and will require face-to-face attendance in specific physical location/s. Students will have face-to-face interactions with lecturer(s) to further their achievement of the learning outcomes. This unit is structured with required upfront preparation before workshops, most students report that they spend an average of one hour preparing before the workshop and one or more hours after the workshop practicing and revising what was covered. The online learning platforms used in this unit provide multiple forms of preparatory and practice opportunities for you to prepare and revise. It is up to individual students to ensure that the out of class study is adequate for the optimal learning outcomes and successes.
Assessment strategy and rationale
Assessments are used primarily to foster learning. ACU adopts a constructivist approach to learning which seeks alignment between the fundamental purpose of each unit, the learning outcomes, teaching and learning strategy, assessment and the learning environment. In order to pass this unit, students are required to achieve an overall score of at least 50%. Using constructive alignment, the assessment tasks are designed for students to demonstrate their achievement of each learning outcome.
Overview of assessments
|Brief Description of Kind and Purpose of Assessment Tasks||Weighting||Learning Outcomes||Graduate Attributes|
Assessment Task 1: Business Report
This assessment task consists of a 2000-word analytical report. This task requires students to demonstrate their declarative and procedural knowledge, with critical and reflective thinking where appropriate and application of capital budgeting techniques.
Submission Type: Individual
Assessment Method: Business report
Artefact: Written report
Assessment Task 2: Research project
This assessment task consists of a 2000-word report. This task requires students to work in groups of a maximum of four members. The assessment is based on a real-life issue, local or international, including social aspects. The primary focus is to apply quantitative and finance methods to evaluate the risk and return of investments. Each syndicate member evaluates the contribution of other members. All group members receive the same grade.
Submission Type: Group
Assessment Method: Written report
Artefact: Written report
GA2, GA5, GA8
Assessment Task 3: Final examination
This assessment task consists of a two-hour final exam. This task requires students to demonstrate their knowledge of the topics covered in the unit and to ascertain whether students have achieved the intended learning outcomes satisfactorily.
Submission Type: Individual
Assessment Method: Examination
Artefact: Response to Exam Paper
LO2, LO3, LO4, LO5
GA4, GA5, GA6, GA7, GA8
Representative texts and references
Parrino, R, Kidwell, DS, Au Yong, HH, Dempsey, M, Morkel-Kingsbury, Ekanayake, S, James, J & Murray, J 2019, Fundamentals of corporate finance, Australasian 3rd edn, John Wiley & Sons Australia, Milton. (ISBN: 978-0-730-35517-5)
Berk, J, DeMarzo, P, Harford J, Ford, G & Mollica, V 2017, Fundamentals of corporate finance, Pearson Australia, 3nd edn, Frenchs Forest, NSW.
Brealey, R, Myers, S & Marcus, A 2019, EBook Fundamentals of corporate finance, 10th edn, McGraw-Hill Australia, Sydney.
Graham, JR, Scott, BS, Adam, C & Gunasingham, B 2017 Corporate finance, Cengage Learning, 2nd Asia-Pacific edition, South Melbourne, VIC.
Hartman, L, DesJardins, JR & MacDonald, C 2017 , Business ethics: decision making for personal integrity and social responsibility, 4thrd edn, McGraw-Hill.
Ross, SA, Bianchi, Westerfield, RW & Jordan, BD, 2019, Fundamentals of corporate finance, 12th edn, McGraw-Hill Australia, Sydney.
Watson, D. & Head, A 2019, Corporate finance: principles and practice, 8th edn, Pearson Education, London, UK.