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    Overview

    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.

    About this paper

    Paper title Financial Decision Making
    Subject Business Studies
    EFTS 0.15
    Points 18 points
    Teaching period(s) Semester 1 (On campus)
    Semester 2 (On campus)
    Domestic Tuition Fees ( NZD ) $912.00
    International Tuition Fees Tuition Fees for international students are elsewhere on this website.
    Restriction
    BSNS 108, PTWY 112
    Schedule C
    Commerce
    Notes
    This is a required paper for BCom from 2017 (to be taken in place of BSNS108 by students completing under earlier regulations).
    Eligibility

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

    Contact

    Semester One: beam.aschakulporn@otago.ac.nz

    Semester Two: sebastian.gehricke@otago.ac.nz

    Teaching staff

    Semester One: beam.aschakulporn@otago.ac.nz

    Semester Two: sebastian.gehricke@otago.ac.nz

    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.

    Textbooks

    Required:

    Parrino, Kidwell, Yong, Dempsey, Morkel-Kingsbury, Ekanayake, James, Murray Business Finance, 1 st edition. Available at the library.

    Recommended:

    Timothy Crack. How to ace your business finance class. Available at the library.

    Course outline

    View the course outline for BSNS114

    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.

    Timetable

    Semester 1

    Location
    Dunedin
    Teaching method
    This paper is taught On Campus
    Learning management system
    Blackboard

    Lecture

    Stream Days Times Weeks
    Attend
    A1 Tuesday 12:00-13:50 9-14, 16, 18-22
    Thursday 12:00-12:50 9-14, 16-22

    Tutorial

    Stream Days Times Weeks
    Attend one stream from
    A1 Monday 09:00-09:50 10-14, 16-22
    A2 Monday 12:00-12:50 10-14, 16-22
    A3 Monday 16:00-16:50 10-14, 16-22
    A4 Tuesday 09:00-09:50 10-14, 16, 18-22
    A5 Tuesday 14:00-14:50 10-14, 16, 18-22
    A6 Wednesday 10:00-10:50 10-14, 16-22
    A7 Wednesday 13:00-13:50 10-14, 16-22
    A8 Thursday 15:00-15:50 10-14, 16-22
    A9 Thursday 16:00-16:50 10-14, 16-22
    A10 Friday 09:00-09:50 10-13, 16-22
    A11 Friday 10:00-10:50 10-13, 16-22
    A12 Friday 11:00-11:50 10-13, 16-22
    A13 Friday 12:00-12:50 10-13, 16-22
    A14 Friday 13:00-13:50 10-13, 16-22
    A15 Thursday 15:00-15:50 10-14, 16-22
    A16 Wednesday 14:00-14:50 10-14, 16-22

    Semester 2

    Location
    Dunedin
    Teaching method
    This paper is taught On Campus
    Learning management system
    Blackboard

    Lecture

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

    Tutorial

    Stream Days Times Weeks
    Attend one stream from
    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
    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

    Overview

    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.

    About this paper

    Paper title Financial Decision Making
    Subject Business Studies
    EFTS 0.15
    Points 18 points
    Teaching period(s) Semester 1 (On campus)
    Semester 2 (On campus)
    Domestic Tuition Fees ( NZD ) $937.50
    International Tuition Fees Tuition Fees for international students are elsewhere on this website.
    Restriction
    BSNS 108, PTWY 112
    Schedule C
    Commerce
    Notes
    This is a required paper for BCom from 2017 (to be taken in place of BSNS108 by students completing under earlier regulations).
    Contact

    Semester One: Beam Aschakulporn

    Semester Two: Isabella Yoon

    Teaching staff

    Semester One: Beam Aschakulporn

    Semester Two: Isabella Yoon

    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.

    Textbooks

    Required:

    Parrino, Kidwell, Yong, Dempsey, Morkel-Kingsbury, Ekanayake, James, Murray Business Finance, 1 st edition. Available at the library.

    Recommended:

    Timothy Crack. How to ace your business finance class. Available at the library.

    Course outline

    View the course outline for BSNS114

    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.

    Timetable

    Semester 1

    Location
    Dunedin
    Teaching method
    This paper is taught On Campus
    Learning management system
    Blackboard

    Lecture

    Stream Days Times Weeks
    Attend
    A1 Tuesday 12:00-13:50 9-13, 15-22
    Thursday 12:00-12:50 9-13, 15-16, 18-22

    Tutorial

    Stream Days Times Weeks
    Attend one stream from
    A1 Monday 09:00-09:50 10-13, 15-22
    A2 Monday 12:00-12:50 10-13, 15-22
    A3 Monday 16:00-16:50 10-13, 15-22
    A4 Tuesday 09:00-09:50 10-13, 15-22
    A5 Tuesday 14:00-14:50 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, 15-16, 18-22
    A9 Thursday 16:00-16:50 10-13, 15-16, 18-22
    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
    A15 Thursday 15:00-15:50 10-13, 15-16, 18-22
    A16 Wednesday 14:00-14:50 10-13, 15-22

    Semester 2

    Location
    Dunedin
    Teaching method
    This paper is taught On Campus
    Learning management system
    Blackboard

    Lecture

    Stream Days Times Weeks
    Attend
    A1 Tuesday 12:00-13:50 29-35, 37-42
    Thursday 09:00-09:50 29-35, 37-42

    Tutorial

    Stream Days Times Weeks
    Attend one stream from
    A1 Monday 09:00-09:50 30-35, 37-42
    A2 Monday 13:00-13:50 30-35, 37-42
    A3 Monday 14:00-14:50 30-35, 37-42
    A4 Monday 15:00-15:50 30-35, 37-42
    A5 Monday 16:00-16:50 30-35, 37-42
    A6 Tuesday 09:00-09:50 30-35, 37-42
    A7 Tuesday 11:00-11:50 30-35, 37-42
    A8 Tuesday 15:00-15:50 30-35, 37-42
    A9 Tuesday 16:00-16:50 30-35, 37-42
    A10 Wednesday 09:00-09:50 30-35, 37-42
    A11 Wednesday 12:00-12:50 30-35, 37-42
    A12 Wednesday 16:00-16:50 30-35, 37-42
    A13 Thursday 12:00-12:50 30-35, 37-42
    A14 Thursday 13:00-13:50 30-35, 37-42
    A15 Thursday 16:00-16:50 30-35, 37-42
    A16 Friday 09:00-09:50 30-35, 37-42
    A17 Friday 10:00-10:50 30-35, 37-42
    A18 Friday 12:00-12:50 30-35, 37-42
    A19 Friday 13:00-13:50 30-35, 37-42
    A20 Friday 14:00-14:50 30-35, 37-42
    A21 Friday 15:00-15:50 30-35, 37-42
    A22 Friday 16:00-16:50 30-35, 37-42
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