BFC2140: Corporate Finance

5% tut participation - my tutor didnt care about your real participation in class, just as long as you came, that was enough for her. although i did hear some other tutors in other classes who marked quite harshly depending on your engagement within the class (which is stupid because 20 of you cant engage equally)
20% online post lecture exercises - ok ill be honest, im writing this two semesters after and i really dont remember this LMAO
25% mid sem test - was quite hard. harder than the final exam in my opinion
50% exam

Overall a nice foundation finance unit that teaches finance broadly. the math isnt complex where you want to die and is quite understandable (coming from someone who did poorly in methods <30 ss). there really is no hard part about this unit from what i remember. this is a nice easy unit to do as a wam booster for those outside the finance department. i have no gripe with this unit

emma zhang

Yes

5 out of 5

Yes, with screen capture

big no

1x 2 hr lecture
1x 1 hr tutorial

Sem 1 2019

HD

5% tutorial participation
20% online exercises
25% Mid-semester test
50% Exam

Despite there being past reviews on this subject, the assessment structure has changed over the past few years warranting me to write a new review for it.

Firstly, I'd have a look at my review for BFC1001 here, as a lot of the content in this subject builds upon the basics discussed in BFC1001, despite it not being a pre-req for this subject. Mostly this subject focuses upon capital budgeting and capital structure, with some lectures covering things like dividend policy and net-working capital management.

The lecture outlines were:

- The exam was 2hrs closed book, consisting of short-answer questions mainly focusing on stuff taught in the second half of the unit. However, I found this exam to be quite difficult as some of the terminology used in the exam, such as soft rationing limit was barely explained upon in the lectures. Therefore, if you had prepared heavily for the exam, then you'd be fine, however it was much harder than I was expecting, probably due to the 34% high distinction rate in the mid-semester test telling of the unit being made too easy up until that point. Despite this, with good revision habits and reading over the lecture slides and memorising as much as you can then you would be fine in the exam.

Overall, I found this unit to be a great introduction to a finance major, as for most students this is the first finance unit they are taking at Clayton, with BFC1001 not being offered this year. However, it could use a number of improvements, in particular more past exams to be provided that accurately highlight the structure of the final exam, rather than just a sample exam which pieced together parts of the course, some of which was not examinable at all.

Dr Emma Zhang - Wks 1-6, also Chief Examiner
Dr Ying Dou - Wks 7-12

- This was held in your allocated lecture slot in week 6. However, due to there being over 900 people enrolled in the subject, some people based on surnames had to complete the test in the M2 lecture theatre, which isn't that far from South 1 where both lecture streams were held. This consisted of some true/false questions, multiple choice questions and short answer questions. There were tricks here and there, however most people that I know did well and the average was close to 70%, with 34% of people scoring a HD in this assessment. Personally, I found it relatively straightforward with just enough time to finish everything, although some careless errors did deprive me from receiving a higher mark.

- These consisted of a bunch of short-answer and multiple choice questions delivered on the Pearson website via a link from the Moodle page. After the last lecture of the week, which was on 5-7pm Friday, then the quiz would open at 9pm to cover the content taught from that lecture's week. You then had from 9pm of that Friday until 9pm the following Friday to complete the work. That way, week 2's quiz would cover week 1's content for example. However, I found these to be quite tedious as often they didn't correlate to what was taught in the lectures or what was being asked to be done in the tutes. Therefore, the questions often took a while to complete, even though there was unlimited time to complete them online. Sometimes they took me up to 4hrs to complete, which I found to be quite an annoyance to carry out in the first place.

No past exams provided, only one sample paper. However past exams can be obtained from past students or by looking online

3.5 out of 5

Yes, with screen capture

Fundamentals of Corporate Finance 3rd edition by Berk is the only prescribed textbook for this unit. Previously, the Parrino textbook was prescribed however an error with the bookstore on my.monash lead to this being displayed as the prescribed textbook when in fact a newer model had been introduced. Despite this, I found the textbook to not be that valuable of a resource, as I only used it for the weekly tutorial questions. The lecture slides are a far more reliable tool as to what is going to appear in the exam.

- Every week there are allocated questions uploaded to Moodle to be completed

- Introduction to business finance and financial mathematics - reviews discounting and PV and FV discussed in BFC1001

- Cost of capital - Showed how to calculate weighted average cost of capital (WACC) applying previous knowledge

- Capital structure - Looked at Modigliani & Miller (M&M) assumptions and how they change for values of levered firms (firms that consist partially or fully of debt) and unlevered firms (firms with no debt in the value of their company)

- Payout policy - Looked at market efficiency as will as the dividend payout policy

Emma lectured for all the lectures up to the mid-semester test, whilst Ying conducted the last 6 lectures. Both lecturers were decent, although personally I preferred Ying due to his humour and knowledge in the topics taught, particularly as he also lectures Corporate Finance 2.

In terms of the assessments:

- Corporate Financial Mathematics - looks at annuities & perpetuities and how to value them

- Valuation of bonds and equities - looks at pricing bonds and shares both ordinary and preference, which helps in later topics

- Capital Budgeting 1 - NPV method discussed

- Capital Budgeting 2 - discussed alternative methods of valuation such as matching cycle method and equivalent annual annuity

- Mid-semester test held in your allocated lecture

- Working capital management

- Capital Budgeting 3 - looked at sensitivity analysis, was hardly examinable

- Risk and return - Looked at means and standard deviations of returns, as well as covariance and correlation

1x 2hr lecture
1x 1hr tute

Semester 1, 2018

•Midsem: 30%
•Tute attendance/participation: 10%
•Exam: 60%

This unit is required for accounting and finance majors, and can be a part of a few others. Its one of you staple second year commerce subjects, so chances are you'll be doing it even if you don't major in finance.

Very well run unit. You would know exactly what was happening, what topics would be covered, what questions would be set, and tutorial answers came out quickly. No complaints what so ever about the lecturers or the administration side of things.

However the actual course material isn’t too amazing. I’m not a huge finance guy, and seemed to just go with the flow of the unit. I wouldn’t say I didn’t like it, there was just nothing that really jumped out at me. I liked the lectures though, and most of the stuff that you learn is fairly interesting.

The topics covered include:
Financial Maths: Should really be called “formulae that you will need”. Not a great deal of maths involved, just number plugging really. You don’t need to know the derivations of any of the formulae, just what each of the variables represents, and when to use each formulae.

Valuation of bonds and equities: All in the title. What is a bond, how do you price a bond etc.. For share valuation you mainly look at constant dividend growth models. P/E ratios are touched on but not in depth. A little bit on risk too.

Project Evaluation: Remember NPV and IRR from first year accounting? These are touched on again, as well as a few other methods such as MIRR and payback period. You also look at projects with different lives and decision tree analysis (with probabilities of events occurring). You look at the advantages/disadvantages of each, which eventually leads you to the idea NPV is the best. Simulation and sensitivity analysis are touched on.

Risk and Return: High risk requires a higher rate of return. Diversification of portfolios and a few more types of risk. You look at very basic stats/probability calculations such as expected returns, standard deviation, covariance a normal distributions. The Capital Asset Pricing Model (CAPM) is introduced.

Cost of Capital: Looks into how the discount rate used for project evaluation is calculated, from the cost of equity and the cost of debt as the weighted average cost of capital (WACC).

Working capital management: Accounting, with a few formulas thrown in. Looks at how current assets are managed, trade-offs between carrying and shortage costs, reordering of stock, and funding strategies.

Capital Structure: How much debt and equity are be used to finance projects and companies. Looks at various factors that should be considered when considering how to finance companies.

Dividend policy: the decisions and effects of different policies in how dividends are paid out by companies.

Mid-sem/exam: The mid-sem is multiple choice and short answer. IS almost entirely number plugging with a couple of theory questions tacked on the end. Past tests with solutions are given out, and the actual test is very similar to the past ones. Same thing holds for the exam, but with no multiple choice and more theory questions.

Tutes aren’t especially helpful. You just run through that particular weeks questions, and the answers are uploaded to moodle at the end of the week anyway. But they are marked, so best to show up.

Overall not particularly challenging unit, is pretty accessible if you don’t leave everything last minute. Don’t be worried about the maths that is involved; if you are ok with plugging numbers into a formula then you should be alright. Not much higher level maths is involved.

Dr Hue Hwa Au Yong (Weeks 1-6)

Dr Jason Choo (Weeks 7-12)

Both are great lecturers. Au Yong sticks to the lecture slides, but her explanations are pretty clear. Writes the answers to the lecture examples on transparencies, and they don't get recorded unfortunately. The slides on Moodle get updated though so all's well. Jason talks more generally about finance. He follows the slides, but also talks about what is generally happening in the finance world. While not directly related to the material, they can be interesting tangents.

Yes - 2 were given out with solutions, but there are more available from past students if you ask nicely

3 out of 5

Yes

Fundamentals of corporate finance – The second edition is prescribed, but the 1st is almost identical so buy second-hand if you can. Has the weekly tute questions in it, so best get your hands on a copy. I didn’t really use it much for the learning of the theory, but others who did said it did its job.

One 2-hour lecture
One 1-hour tutorial

Semester 1 2014

HD