Course Title: Advanced Corporate Finance

Part A: Course Overview

Course ID: 005017

Course Title: Advanced Corporate Finance

Credit Points: 16

Course Code




Learning Mode

Teaching Period(s)


City Campus


625H Economics, Finance & Marketing


Sem 1 2006,
Sem 2 2006

Course Coordinator: Tom Josev

Course Coordinator Phone: +61 3 9925-5858

Course Coordinator Email:

Course Coordinator Location: 108.12

Pre-requisite Courses and Assumed Knowledge and Capabilities

BAFI 1059 Managerial Finance ECON 1095 Quant Methods in Finance

Course Description

This course introduces students to the theoretical and practical framework of corporate finance. In doing so, it emphasises the importance of using theory to solve practical financial problems.

The use of the theoretical framework will equip financial managers with the ability to ask the right questions in their rapidly changing and often unstructured work environment. Not only will students/financial managers be able to identify problems that need solving but also those problems that do not.

In order for the student to appreciate the relevance of the theories derived, the student will evaluate the empirical evidence to determine the utility of the theory to the work environment. It is crucial to the course that the student develops a capacity to analyse, interpret and evaluate existing empirical research. The skills acquired in the course Financial Econometrics will be utilised in this unit.

Objectives/Learning Outcomes/Capability Development

At the conclusion of this course, you should be able to:

(a) understand and be familiar with the theoretical and practical framework
of corporate finance;
(b) evaluate empirical evidence relating to the theory of corporate finance;
(c) develop a capacity to analyse, interpret and evaluate existing empirical
(d) apply the practical skills acquired in this course to practice.

To achieve the objectives listed above this course requires you to participate in various learning activities. These activities comprise the student in actively participating in the class. This will involve the student in adapting his/her learning methodology to the course’s needs. The experiences can be ‘broken’ down to a better understanding of,

(a) Learning Methodology

This course is a self directed learning unit in which the student takes the
responsibility for his/her own learning.

(b) Role of Class/Lecture
The purpose of the class/lecture is to identify and explore issues to be resolved in
the topic under study. The student is expected to generate his/her own notes given :

(a) the issues identified by the lecturer.
(b) the prescribed ( and additional) reading
(c) the issues of concern identified by the student

Overview of Learning Activities

The following modules will be covered in this course,

Module 1. Market Efficiency, Corporate Financial Announcements and other Signals
Module 2. Option Pricing Model and its Application(s) to Corporate Finance.
Module 3. The Market for Corporate Control and Corporate Restructuring
Module 4. Agency Theory, Executive Compensation and Financial Contracting
Module 5. Corporate Financial Strategy

Overview of Learning Resources

Students should read the local business paper e.g. Australian Financial Review and/or Asian Wall Street Journal. Students should also familairise themselves with the RMIT eLibrary.

Overview of Assessment

The assessment tasks you are required to complete are: 

Mid-Semester Test       30%
Final Test                        70%
Total                                100%

More detail on the mid-semester test will be given in class.