General Information
This subject introduces the analytical approaches used by managers when making financial decisions. Core topics include the time value of money, the relationship between risk and return (i.e., CAPM), portfolio theory (i.e., diversification), and capital structure. On successful completion of the subject, students will be able to apply these concepts to value both stocks and bonds, estimate the cost of capital and implement discounted cash flow techniques in order to make capital budgeting decisions. Students will also gain exposure to real-time market data via the Bloomberg database.
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Details
Academic unit: Bond Business School Subject code: FINC71-101 Subject title: Fundamentals of Finance Subject level: Postgraduate Semester/Year: September 2022 Credit points: -
Delivery & attendance
Timetable: https://bond.edu.au/timetable Delivery mode: Standard Workload items: - Lecture: x12 (Total hours: 24) - Lecture 1
- Computer Lab: x12 (Total hours: 24) - Computer Lab 2
- Personal Study Hours: x12 (Total hours: 72) - Recommended study time & reviewing materials
Attendance and learning activities: Attendance at all class sessions is expected. Students are expected to notify the instructor of any absences with as much advance notice as possible. -
Resources
Prescribed resources: Books
- R. Charles Moyer,James R. McGuigan,Ramesh P. Rao (2017). Contemporary Financial Management. n/a, Cengage Learning 50
Others
- Texas Instruments BA II Plus Professional.
iLearn@Bond & Email: iLearn@Bond is the online learning environment at Bond University and is used to provide access to subject materials, lecture recordings and detailed subject information regarding the subject curriculum, assessment and timing. Both iLearn and the Student Email facility are used to provide important subject notifications. Additionally, official correspondence from the University will be forwarded to students’ Bond email account and must be monitored by the student. To access these services, log on to the Student Portal from the Bond University website as www.bond.edu.au
| Academic unit: | Bond Business School |
|---|---|
| Subject code: | FINC71-101 |
| Subject title: | Fundamentals of Finance |
| Subject level: | Postgraduate |
| Semester/Year: | September 2022 |
| Credit points: |
| Timetable: | https://bond.edu.au/timetable |
|---|---|
| Delivery mode: | Standard |
| Workload items: |
|
| Attendance and learning activities: | Attendance at all class sessions is expected. Students are expected to notify the instructor of any absences with as much advance notice as possible. |
| Prescribed resources: | Books
Others
|
|---|---|
| iLearn@Bond & Email: | iLearn@Bond is the online learning environment at Bond University and is used to provide access to subject materials, lecture recordings and detailed subject information regarding the subject curriculum, assessment and timing. Both iLearn and the Student Email facility are used to provide important subject notifications. Additionally, official correspondence from the University will be forwarded to students’ Bond email account and must be monitored by the student. To access these services, log on to the Student Portal from the Bond University website as www.bond.edu.au |
Enrolment requirements
| Requisites: |
Nil |
|---|---|
| Assumed knowledge: |
Assumed knowledge is the minimum level of knowledge of a subject area that students are assumed to have acquired through previous study. It is the responsibility of students to ensure they meet the assumed knowledge expectations of the subject. Students who do not possess this prior knowledge are strongly recommended against enrolling and do so at their own risk. No concessions will be made for students’ lack of prior knowledge. Assumed Prior Learning (or equivalent):
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| Restrictions: |
Nil |
Assurance of learning
Assurance of Learning means that universities take responsibility for creating, monitoring and updating curriculum, teaching and assessment so that students graduate with the knowledge, skills and attributes they need for employability and/or further study.
At Bond University, we carefully develop subject and program outcomes to ensure that student learning in each subject contributes to the whole student experience. Students are encouraged to carefully read and consider subject and program outcomes as combined elements.
Program Learning Outcomes (PLOs)
Program Learning Outcomes provide a broad and measurable set of standards that incorporate a range of knowledge and skills that will be achieved on completion of the program. If you are undertaking this subject as part of a degree program, you should refer to the relevant degree program outcomes and graduate attributes as they relate to this subject.
Subject Learning Outcomes (SLOs)
On successful completion of this subject the learner will be able to:
- Explain to specialist and non-specialist audiences the relevant issues encountered by financial managers, along with the analytical techniques available in addressing these issues, while maximising firm value.
- Utilize spreadsheets, formulae, and financial calculators to value various cash flow structures (e.g., amortising loans, bonds, common stocks) whilst identifying and addressing critical aspects of uncertainty.
- Apply advanced theoretical and technical finance knowledge to analyse the risk/return trade-off of investments and contextualise the relationship between a firm and the capital markets.
- Demonstrate competence in the use of a Bloomberg terminal to interpret market data, economic indicators and other financial research.
- Exercise judgement, under minimal guidance, and employ technical finance knowledge to prepare necessary cash flows and methodically evaluate the capital budgeting projects of a firm whist evaluating their cost of capital.
Generative Artificial Intelligence in Assessment
The University acknowledges that Generative Artificial Intelligence (Gen-AI) tools are an important facet of contemporary life. Their use in assessment is considered in line with students’ development of the skills and knowledge which demonstrate learning outcomes and underpin study and career success. Instructions on the use of Gen-AI are given for each assessment task; it is your responsibility to adhere to these instructions.
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Assessment details
Type Task % Timing* Outcomes assessed Computer-aided Test (Open) Time Value of Money Concept Test consisting of multiple choice and short answer with calculations. 15% Week 4 2 Computer-aided Test (Open) Risk & Return Concept Test consisting of short answer with calculations. 15% Week 6 1,3 Computer-aided Test (Open) Capital Budgeting Concept Test consisting of short answer with calculations. 15% Week 11 1,2,5 Computer-aided Test (Open) Bloomberg Market Concepts (BMC) Test covering four modules — Economics, Currencies, Fixed Income and Equities. 15% Week 11 4 Case Analysis In-depth case analysis report requiring you to apply tools and theories and make recommendations. 40% Week 12 1,2,3,5 - * Assessment timing is indicative of the week that the assessment is due or begins (where conducted over multiple weeks), and is based on the standard University academic calendar
- C = Students must reach a level of competency to successfully complete this assessment.
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Assessment criteria
Assessment criteria
High Distinction 85-100 Outstanding or exemplary performance in the following areas: interpretative ability; intellectual initiative in response to questions; mastery of the skills required by the subject, general levels of knowledge and analytic ability or clear thinking. Distinction 75-84 Usually awarded to students whose performance goes well beyond the minimum requirements set for tasks required in assessment, and who perform well in most of the above areas. Credit 65-74 Usually awarded to students whose performance is considered to go beyond the minimum requirements for work set for assessment. Assessable work is typically characterised by a strong performance in some of the capacities listed above. Pass 50-64 Usually awarded to students whose performance meets the requirements set for work provided for assessment. Fail 0-49 Usually awarded to students whose performance is not considered to meet the minimum requirements set for particular tasks. The fail grade may be a result of insufficient preparation, of inattention to assignment guidelines or lack of academic ability. A frequent cause of failure is lack of attention to subject or assignment guidelines. Quality assurance
For the purposes of quality assurance, Bond University conducts an evaluation process to measure and document student assessment as evidence of the extent to which program and subject learning outcomes are achieved. Some examples of student work will be retained for potential research and quality auditing purposes only. Any student work used will be treated confidentially and no student grades will be affected.
| Type | Task | % | Timing* | Outcomes assessed |
|---|---|---|---|---|
| Computer-aided Test (Open) | Time Value of Money Concept Test consisting of multiple choice and short answer with calculations. | 15% | Week 4 | 2 |
| Computer-aided Test (Open) | Risk & Return Concept Test consisting of short answer with calculations. | 15% | Week 6 | 1,3 |
| Computer-aided Test (Open) | Capital Budgeting Concept Test consisting of short answer with calculations. | 15% | Week 11 | 1,2,5 |
| Computer-aided Test (Open) | Bloomberg Market Concepts (BMC) Test covering four modules — Economics, Currencies, Fixed Income and Equities. | 15% | Week 11 | 4 |
| Case Analysis | In-depth case analysis report requiring you to apply tools and theories and make recommendations. | 40% | Week 12 | 1,2,3,5 |
- * Assessment timing is indicative of the week that the assessment is due or begins (where conducted over multiple weeks), and is based on the standard University academic calendar
- C = Students must reach a level of competency to successfully complete this assessment.
Assessment criteria
| High Distinction | 85-100 | Outstanding or exemplary performance in the following areas: interpretative ability; intellectual initiative in response to questions; mastery of the skills required by the subject, general levels of knowledge and analytic ability or clear thinking. |
|---|---|---|
| Distinction | 75-84 | Usually awarded to students whose performance goes well beyond the minimum requirements set for tasks required in assessment, and who perform well in most of the above areas. |
| Credit | 65-74 | Usually awarded to students whose performance is considered to go beyond the minimum requirements for work set for assessment. Assessable work is typically characterised by a strong performance in some of the capacities listed above. |
| Pass | 50-64 | Usually awarded to students whose performance meets the requirements set for work provided for assessment. |
| Fail | 0-49 | Usually awarded to students whose performance is not considered to meet the minimum requirements set for particular tasks. The fail grade may be a result of insufficient preparation, of inattention to assignment guidelines or lack of academic ability. A frequent cause of failure is lack of attention to subject or assignment guidelines. |
Quality assurance
For the purposes of quality assurance, Bond University conducts an evaluation process to measure and document student assessment as evidence of the extent to which program and subject learning outcomes are achieved. Some examples of student work will be retained for potential research and quality auditing purposes only. Any student work used will be treated confidentially and no student grades will be affected.
Study Information
Submission procedures
Students must check the iLearn@Bond subject site for detailed assessment information and submission procedures.
Policy on late submission and extensions
A late penalty will be applied to all overdue assessment tasks unless an extension is granted by the subject coordinator. The standard penalty will be 10% of marks awarded to that assessment per day late with no assessment to be accepted seven days after the due date. Where a student is granted an extension, the penalty of 10% per day late starts from the new due date.
Academic Integrity
University’s Academic Integrity Policy defines plagiarism as the act of misrepresenting as one’s own original work: another’s ideas, interpretations, words, or creative works; and/or one’s own previous ideas, interpretations, words, or creative work without acknowledging that it was used previously (i.e., self-plagiarism). The University considers the act of plagiarising to be a breach of the Student Conduct Code and, therefore, subject to the Discipline Regulations which provide for a range of penalties including the reduction of marks or grades, fines and suspension from the University.
Bond University utilises Originality Reporting software to inform academic integrity.Feedback on assessment
Feedback on assessment will be provided to students within two weeks of the assessment submission due date, as per the Assessment Policy.
Accessibility and Inclusion Support
If you have a disability, illness, injury or health condition that impacts your capacity to complete studies, exams or assessment tasks, it is important you let us know your special requirements, early in the semester. Students will need to make an application for support and submit it with recent, comprehensive documentation at an appointment with a Disability Officer. Students with a disability are encouraged to contact the Disability Office at the earliest possible time, to meet staff and learn about the services available to meet your specific needs. Please note that late notification or failure to disclose your disability can be to your disadvantage as the University cannot guarantee support under such circumstances.
Additional subject information
This is a compulsory subject for eligibility requirements for Certified Practising Accountants Australia (CPA Australia) and Chartered Accountants Australia and New Zealand (CA ANZ). As part of the requirements for Business School quality accreditation, the Bond Business School employs an evaluation process to measure and document student assessment as evidence of the extent to which program and subject learning outcomes are achieved. Some examples of student work will be retained for potential research and quality auditing purposes only. Any student work used will be treated confidentially and no student grades will be affected.
Subject curriculum
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Introduction to Financial Management
An introduction to the role of the financial manager, forms of business organisation and the larger environment in which businesses operate. Consideration will be given to the relationship of managerial finance to economics, accounting, and the goal of the firm.
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Time Value of Money
Introduces the role of time value in finance, the use of computational tools, and the basic patterns of cash flow. You will calculate the future value and the present value for single amounts and for cash flow streams and understand the effect of compounding frequency on future value.
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Risk and Return
Introduces the meaning and fundamentals of risk, return, and risk preferences. You will learn procedures for measuring the risk of a single asset and a portfolio, in terms of correlation and diversification. You will explore the capital asset pricing model (CAPM) and its relationship to the security market line (SML).
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Pricing Bonds, Preferred Stock and Common Stock
Introduces the general features and rights of bonds and stocks and the differences between debt and equity. You will apply the basic valuation model to bonds, preferred stock and common stock. Consideration will be given to the impact of required return and time to maturity on bond values and the growth rate on stock values when using the dividend discount model.
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Capital Budgeting and Dividend Policy
Introduces the rationale for capital budgeting and steps in the capital budgeting process. You will determine the relevant cash flows to make decisions for acquiring new facilities, new products and expanding existing lines. Consideration will be given to the importance of risk on the capital budgeting process. Introduces theories relating to optimal dividend policy and the effect of dividends on firm value.
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Cost of Capital
Introduces the key assumptions that underlie cost of capital and the specific sources of capital it includes. You will apply these fundamentals to calculate the cost of debt and equity and apply alternative weighting schemes to determine a firm’s weighted average cost of capital (WACC). You will explore how the WACC can be used to make corporate financing and investment decisions.