University of Melbourne - FNCE20005: Corporate Financial Decision Making

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.

✔ 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.

SUBJECT CODE

SUBJECT NAME

ACCT10001

Accounting Reports and Analysis

ACCT10002

Introductory Financial Accounting

ACCT20001

Accounting for Management Decisions

ECOM20001

Econometrics 1

ECOM30001

Basic Econometrics

ECOM30002

Econometrics 2

ECON10003

Introductory Macroeconomics

ECON10004

Introductory Microeconomics

ECON10005

Quantitative Methods 1

ECON20002

Intermediate Microeconomics

ECON20003

Quantitative Methods 2

FNCE20005

Corporate Financial Decision Making

FNCE30001

Investments

FNCE30007

Derivative Securities

FNCE40001

Advanced Corporate Finance

MAST10010

Data Analysis

MAST20005

Statistics