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BSNS114 Financial Decision Making

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Introduction to some basic characteristics of financial markets. The time value of money, calculations of fair value for bonds and stocks, criteria for financing a business, risk-return trade-offs, regulatory frameworks and ethical considerations are included.

This paper introduces students to business finance with a primary focus on the principles of financial valuation. We first discuss the concept of time value of money together with looking at how we can apply these valuation techniques to making personal investment decisions. Since decision making with investments virtually always involves risk (uncertainty), we will then introduce the concept of risk and the relation between risk and return. This is followed by a discussion of the cost of financing and how that, as integrated with cash flows, will impact on the valuation outcome and decision making at a corporate level. We close the paper looking at the relevance of capital structure and dividend policy in corporate performance.

Paper title Financial Decision Making
Paper code BSNS114
Subject Business Studies
EFTS 0.15
Points 18 points
Teaching period(s) First Semester, Second Semester
Domestic Tuition Fees (NZD) $872.70
International Tuition Fees (NZD) $4,405.05

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BSNS 108
Schedule C
This is a required paper for BCom from 2017 (to be taken in place of BSNS 108 by students completing under earlier regulations).

Prior knowledge in secondary school-level economics, algebra, statistics and accounting would be beneficial but is not compulsory.


Semester One:
Semester Two:

Teaching staff

Semester One: Olena Onishchenko
Semester Two: Sebastian Gehricke

Paper Structure
  • Quiz 1, Quiz 2, Quiz 3 and Quiz 4 - 2.5% each
  • Midterm Exam - 35%
  • Final Exam - 55%
Teaching Arrangements
3 hours of lectures and a 50-minute tutorial per week
Ross, Trayler, Bird, Westerfiled and Jordan. Essentials of Corporate Finance, 4th edition. Available at the library.

Timothy Crack. How to ace your business finance class. Available at the library.
Course outline
View the course outline for BSNS 114
Graduate Attributes Emphasised
Critical thinking, Self-motivation.
View more information about Otago's graduate attributes.
Learning Outcomes

Upon successful completion of this paper, you should be able:

  • To be financially literate
  • To understand the basic characteristics of companies and capital markets
  • To understand time value of money and how it affects financial decisions at the personal and organisational level
  • To understand bonds and stocks, including the calculation of their fair value
  • To understand concepts and calculation of the simple models for free cash flows for a business project
  • To critically analyse business investment decisions
  • To understand the trade-off between risk and return for investors
  • To understand the factors affecting a company's decision to borrow from debtholders versus raising money from shareholders

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First Semester

Teaching method
This paper is taught On Campus
Learning management system


Stream Days Times Weeks
A1 Tuesday 12:00-13:50 9-13, 15-22
Thursday 12:00-12:50 9-13, 15-22


Stream Days Times Weeks
Attend one stream from
A1 Monday 09:00-09:50 10-13, 15-16, 18-22
A2 Monday 12:00-12:50 10-13, 15-16, 18-22
A3 Monday 16:00-16:50 10-13, 15-16, 18-22
A4 Tuesday 09:00-09:50 10-13, 15-22
A5 Tuesday 15:00-15:50 10-13, 15-22
A6 Wednesday 10:00-10:50 10-13, 15-22
A7 Wednesday 13:00-13:50 10-13, 15-22
A8 Thursday 15:00-15:50 10-13, 15-22
A9 Thursday 16:00-16:50 10-13, 15-22
A10 Friday 09:00-09:50 10-12, 15-22
A11 Friday 10:00-10:50 10-12, 15-22
A12 Friday 11:00-11:50 10-12, 15-22
A13 Friday 12:00-12:50 10-12, 15-22
A14 Friday 13:00-13:50 10-12, 15-22

Second Semester

Teaching method
This paper is taught On Campus
Learning management system


Stream Days Times Weeks
A1 Tuesday 12:00-13:50 28-34, 36-41
Thursday 09:00-09:50 28-34, 36-41


Stream Days Times Weeks
Attend one stream from
A1 Monday 09:00-09:50 29-34, 36-41
A2 Monday 13:00-13:50 29-34, 36-41
A3 Monday 14:00-14:50 29-34, 36-41
A4 Monday 15:00-15:50 29-34, 36-41
A5 Monday 16:00-16:50 29-34, 36-41
A6 Tuesday 09:00-09:50 29-34, 36-41
A7 Tuesday 11:00-11:50 29-34, 36-41
A8 Tuesday 15:00-15:50 29-34, 36-41
A9 Tuesday 16:00-16:50 29-34, 36-41
A10 Wednesday 09:00-09:50 29-34, 36-41
A11 Wednesday 12:00-12:50 29-34, 36-41
A12 Wednesday 16:00-16:50 29-34, 36-41
A13 Thursday 12:00-12:50 29-34, 36-41
A14 Thursday 13:00-13:50 29-34, 36-41
A15 Thursday 16:00-16:50 29-34, 36-41
A16 Friday 09:00-09:50 29-34, 36-41
A17 Friday 10:00-10:50 29-34, 36-41
A18 Friday 12:00-12:50 29-34, 36-41
A19 Friday 13:00-13:50 29-34, 36-41
A20 Friday 14:00-14:50 29-34, 36-41
A21 Friday 15:00-15:50 29-34, 36-41
A22 Friday 16:00-16:50 29-34, 36-41