MASSEY UNIVERSITY

SCHOOL OF
ECONOMICS & FINANCE

FIN 700

Managerial Finance

Administration Guide

Block Mode
Manawatu Campus
2018
 COLLEGE OF BUSINESS – OUR STATEMENT OF
MISSION

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Transforming business

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people. We will add to knowledge of global business
principles through our research and scholarship, and will
share that knowledge and its practical application through
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committed to open access, life-long learning, and
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Zealand’s future in a global economy while being respectful
of our unique heritage.

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 TABLE OF CONTENTS

Message to students 1

Paper description 2

Learning outcomes 2

Paper outline 3

Resource material 4

Method of study 7

Grading and evaluation 8

FIN 700 Assignment Cover Sheet 10

AACSB 12

Appendix 1: How to access Stream 13

Appendix 2: Plagiarism policy 13

Message to students
As the Paper Coordinator of FIN 700 Managerial Finance, I would like to welcome you and
offer a few introductory remarks concerning the paper.

First of all, please read the Administration Guide. These notes contain important information
on the format and content of the paper.

Managerial Finance is the first graduate-level paper in finance available to you taught by
Massey University. Given that the level is post-graduate, the workload and level of the
material are reasonably demanding. Add in work and family commitments, and it totals to a
big sacrifice. But remember, it won’t last forever, and if you work steadily through-out the
duration of the paper, then you should master the material and assessment. If you find that
you are struggling, please feel free to contact me and discuss your problems.

Please note that the major assignment may require you to use an Excel spreadsheet. Some
of your background on financial applications using Excel spreadsheets can be proven useful.
I also urge you to regularly check the Stream website for this paper, available about one
month before the block course dates in Ho Chi Minh City. The website contains
administrative guide, lecture notes, forums for discussions, and all other materials which will
be useful throughout the course.

Should you have any questions during the semester you can contact me through the Stream
website or via e-mail. I look forward to meeting you at the block course starting 29 th
November, and I wish you all an enjoyable and successful year of study.

Jeff Wongchoti

Contact Details

Paper Coordinator
Associate Professor Jeff Wongchoti Enquiries:
Room 2.06, Business Studies West academic: via Stream website
School of Economics and Finance personal: J.Wongchoti@massey.ac.nz
Massey University, Manawatu Campus,
Private Bag 11-222, Palmerston North
New Zealand 4442
Paper description
An introduction to the theory of finance with an emphasis on managerial and corporate
applications. Topics covered include the sources, costs and valuation of financial assets,
investments, capital budgeting, capital structure, dividend policy and financial planning.

Learning outcomes
Students who successfully complete this paper should be able to:

1.Apply the theories of finance to managerial goals and decision making, in the local and
global environment.
2.Value financial assets incorporating the principles of time value of money and risk and
return.
3.Analyse short and long-term decisions using accepted financial management techniques.
4.Evaluate firm financing, capital structure, and dividend decisions using financial theory.
5.Describe financial derivatives and explain how they are used to manage risk.
Paper outline
The following paper outline should be used as a guideline to ensure that you keep up-to-date
with the paper requirements. Ideally, you should attempt to have completed all readings
listed below prior to attending the block course. However, it is essential that you have
completed the readings no later than the weeks noted in the schedule below as it is
necessary for you to be well prepared for the lectures, tests, assignment and final exam. 

Module Lecture Topic Textbook Session

Chapter(s)

1 Overview of corporate 1.1 Corporate finance 1, 2 Sun 25 Nov

finance (AM)

1.2 Financial statements 3, 4 (PM)

and long-term financial
planning

2 Valuation, capital 2.1 The valuation of future 5, 6 Tue 27 Nov

budgeting and risk cash flows Thurs 29 Nov

2.2 Capital budgeting 7, 8 Fri 30 Nov

Sun 2 Dec
(PM)
2.3 Risk and return 10, 11 Tue 4 Dec

3 Short-term financial 3.1 Current investment 12, 13 Thurs 6 Dec

management decisions and credit
management

4 Financial markets and 4.1 Short- and long-term 14 to16, Fri 7 Dec
financing financing /Cost of 17 Sun 9 Dec
capital (AM)

4.2 dividend policy 18 Sun 9 Dec

(PM)

4.3 Financial leverage and 19 Tue 11 Dec

capital structure policy

5 Topics in corporate International corporate 22 Thurs 13 Dec

finance finance
Resource material
Required reading:
The required textbook for FIN 700 Managerial Finance is:

Ross, Thompson, Christensen, Westerfield and Jordan (2011). Fundamentals of

Corporate Finance. (5th ed.). North Ryde, NSW: McGraw-Hill.

This is an Australian adaptation of the American edition by Ross, Westerfield and Jordan.
Note that the American book is not a recommended alternative. Please make sure that you
read the correct book (i.e. 5th Australian edition).

The course materials that are available on the Stream website should also be considered
required reading. This includes this Administration Guide, the Study Guide and Solutions to
Selected Problems. .

Recommended additional source material

(a) Finance textbooks:

Bishop, S., et al. (2003). Corporate Finance. (5th ed.). Sydney: Holt, Rinehart and
Winston (also 4th ed., 2000).

Brigham, E.F., and Ehrhardt, M.C. (2011). Financial Management: Theory and
Practice (13th ed). South Western, Cengage Learning (also 12th ed., 2008).

Brealey, R. et al. (2000). Principles of Corporate Finance. (1st Australian ed.).

Roseville, NSW: McGraw-Hill.

Campsey, B.J. et al. (1994). Introduction to Financial Management. (1st Australian

ed.). Sydney: Harcourt Brace.

Gitman, L.J., et al. (2010). Principles of Managerial Finance (6th Australian ed.).
Frenchs Forest, N.S.W.: Pearson Education (also 5th ed., 2008).

Petty, J. William et al. (2009). Financial Management. (5th Australian ed.). Sydney:
Pearson Education.

Peirson, G. et al. (2006). Business Finance. (9th ed.). Sydney: McGraw-Hill.

(b) FIN 700 Managerial Finance Stream website
The e-learning category for this paper is “web-enhanced”, meaning that students are
expected to access the additional online materials and resources to help create an “online
learning environment”. This will allow you to communicate and collaborate with others taking
the paper and with me. Any feedback you can provide on the value of this service, both
during the paper informally as well as in the formal paper evaluations, would be greatly
appreciated.

In the appendices you will find information on how to access the online learning environment.
Accessing the online learning environment helps you do well in the paper in the following
ways:

● increased interaction with your peers. Be sure to visit the site and read and respond to
the discussions.
● regular participation in online discussions helps increase motivation for finishing readings
in a timely manner. This is also a good place to ask questions.
● increased exposure to the material, which will increase retention.
● periodic self-testing using the module quizzes, which will provide feedback on your
progress.

Furthermore, you will have the convenience of submitting your assignment via the FIN 700
Stream website. You will be able to access the FIN 700 website for the duration of the
semester. The last day of access is the day of the final examination.

Forums

The forums allow you to communicate and collaborate, through the internet, with others
taking the paper and with me. In order to make the most profitable use of the environment
and discussions you should:

● access the online environment to check for messages and changes to content at least
once per week.
● Use the Search Forums tool on the home page to find any existing information on a
subject of interest before you make an inquiry through a forum. Also use the search
function in Adobe Acrobat to search the Frequently Asked Questions (FAQ) that are
organised by module.
● address any problems of an academic nature to a forum, and not to my personal e-mail
address. I will regularly monitor the discussion and provide feedback on issues and
answers to questions when necessary. Issues of a sensitive or personal nature should
be addressed to my personal e-mail address: J.wongchoti@massey.ac.nz.
● send an introductory message to the class through a forum. In this you should introduce
yourself by name, let people know some of your educational background and work
experience, why you are taking the course and what you are hoping to get out of it. This
will serve as an "icebreaker". Feel free to welcome others who post their first messages
too.
● discuss the paper content, assessment and topics of interest as you go through the
readings and study guide.
● be respectful of others’ time, contributions, and opinions. Online discussions are
regarded as similar to verbal communications in a group setting, so people should feel
free to ask questions, sound out others about their ideas, and ask for help. However,
please do not reveal any part of your solutions to the major assignment in this forum.
Demonstrations of Financial Applications Using Excel

To assist you to undertake the capital budgeting assignment, I have developed a series of
demonstrations of financial applications using Excel. These are available for you to use via
the website, and include financial functions, risk analysis tools and graphic applications.

Supplemental course material

From time to time I will make available some supplemental material on the website. This
includes an Excel spreadsheet template to solve the major assignment, and material to
assist your preparation for the assignment and final exam.
Method of study
Each week you should make sure you do each of the following:

● Read the assigned chapters in the textbook as per the paper outline and make notes
summarising the key points.
● Attempt the ‘focused end-of-chapter questions’ indicated in the Administration Guide.
● Participate in the class discussions on the FIN 700 Stream website

Please ensure that you keep up with the material each week as you will find it difficult to
catch up if you fall behind.

The FIN 700 Managerial Finance paper is one where students inevitably do better if they
work steadily throughout the paper. Furthermore, although the body of finance theory is
fundamental, the regular solving of numerical exercises alongside the descriptive material is
instrumental in gaining mastery of the paper. Consequently, it is essential that students
undertake to answer the selected end-of-chapter questions in the Assignment Schedule.
While the tests, major assignment and final examination will be marked by academic staff,
the emphasis must be on self-assessment. To this end, suggested solutions to selected end-
of-chapter questions are included on the Stream website. Your worked solutions should not
be submitted for evaluation.

You must also attend a block course from 29 November to 18 December 2015. This course
will include lectures and two tests. At the course, you may raise any further questions that
you may have as a result of your self-study. The tentative schedule is listed below.

Date Lectures Theme Test

Sunday 25 Nov Ch 1-2 Corporate Finance
Ch 3-4 Ratio analysis

Tuesday 27 Nov Ch 5-6 Time Value of Money/ Valuation

Thursday29 Nov - continued
Friday 30 Nov Ch 7-8 Capital budgeting
Sunday 2 Dec Test #1 (AM) #1
Ch 7-8 (PM) Capital budgeting - continued

Tuesday 4 Dec Ch 10-11 Risk & return

Thursday 6 Dec Ch 12 -13 Short-term financial management
Friday 7 Dec Ch 14-16 Financing
Sunday 9 Dec Ch 17 (AM) Cost of capital
Ch 18 (PM) Payout policy

Tuesday 11 Dec Ch 19 Capital structure

Thursday 13 Dec Ch 22 International financial management
Friday 14 Dec Test #2 #2

Teaching times are expected to be from 18.15 – 20.45 on the above weekdays, from 9.00 –
12.00 and 13.30 – 16.30 on Sundays.
Grading and evaluation
The paper grade will be determined as follows:

Learning
Outcome # Weight Due Date
Test 1 LO1-2 15% 2 December 2018
Test 2 LO 3, 5 15% 14 December 2018
Major Assignment LO 4, 7 10% 16 January 2019
Final Examination LO1-10 60% 17 February 2019
100%

Test 1
Time 2.5 hours

When Sunday 2 December 2018, 9.00 to 11.30 am

Structure Multiple choice questions and short-answer problems with a

mixture of theory and problem solving
A formula sheet will be included in the test. It will be made
available on the Stream site for your use prior to the test.

Resources Allowed The test is CLOSED book.

Coverage Module 1, Chapters 1, 2, 3, 4

Study preparation You will need to complete the readings and selected end-of-
chapter questions for the material to be covered.

Test 2
Time 2.5 hours

When Friday 14 December 2018, 18.15 to 20.45 (pm)

Structure Multiple choice questions and short-answer problems with a

mixture of theory and problem solving
Compounding/discounting annuity tables and a formula sheet will
be included in the test. The formula sheet will be made available
on the Stream site for your use prior to the test.

Resources Allowed The test is CLOSED book.

Coverage Part of Module 2 - Chapters 5 and 6.

Study preparation You will need to complete the readings and selected end-of-
chapter questions for the material to be covered.
Major assignment
The major assignment is worth a maximum of 10 percent toward the final grade in this
paper.

The major assignment covers the topic of ratio analysis, relating to Ross Chapters 3 and 4.
The learning objectives are to assist students to:

● develop skills and abilities to evaluate local companies.

Assessment in FIN 700 will be based on group/work team, Please refer to the plagiarism
policy detailed in the Appendices, as this policy applies to the major assignments.

The major assignment will be marked and returned via Stream with comments within four
weeks from the date of receipt. Further details of the major assignment will be made
available on the FIN 700 Stream website.

Final examination
It is the policy of the School of Economics and Finance that each student must pass the final
examination in order to pass a paper. This necessarily applies to FIN 700 Managerial
Finance. You must pass the final examination in order to achieve a passing grade in this
paper.

The final examination will contain both computational and theoretical questions. The
examinable material will comprise the entire syllabus, covering all learning outcomes 1-10. A
formulae sheet and relevant time value of money tables will be provided. A copy of the
formulae sheet to be used for the upcoming final exam will be made available through the
FIN 700 Stream website. Although annuity tables are provided, students also need to
understand how to calculate annuity factors using a calculator. Note, possession of a
financial calculator is not necessary.
FIN 700 Assignment Cover Sheet

Submission details:
Student name:
Massey Student ID number:
Student e-mail address:

Plagiarism notice:
Copying or paraphrasing of another person’s work, whether published or unpublished,
without clearly acknowledging it, will be considered as plagiarism, as is unacceptable. The
University Calendar contains a plagiarism policy. There are strict penalties for plagiarism.

In submitting your assignment, you acknowledge that you have read this notice.

Please contact your paper coordinator if you need further assistance. *****

Instructions for use (Please read carefully):

1. Copy and paste this Assignment Cover Sheet from the FIN 700 web site into the first
page of the word-processed copy of your assignment.
2. Ensure you enter your name, ID number and e-mail address in the cells provided above.
Focused end-of-chapter questions
QUESTIONS

Chapter 1: 2, 5, 7
Chapter 2: 5, 8, 16, 17

Chapter 3: 1, 2, 12, 18, 24, AQ12

Chapter 4: 5, 7, 9, 10, 11, 12, AQ22

Chapter 5: 4, 6, 8, 12, 14, 15, 24, 27, 28, 38, 39, 40, 48, 52, 53
Chapter 6: 5, 6, 7, 8, 15, 16, 18

Chapter 7: 7, 15, 17, 19, 20

Chapter 8: 9, 12, 16, 17, 19
Chapter 9: 4, 8, 14, 16, 19, 20, 21, 22

Chapter 10: 6, 7, 9, 14, 18, 23

Chapter 11: 8, 9, 12, 16, 19, 24, 26

Chapter 12: 7, 9, 10, 11, 15

Chapter 13: 13, 26, 27, 35

Chapter 14: 1, 6, 8, 9
Chapter 15: 3, 15, 19
Chapter 16: 2, 8, 12, 14

Chapter 17: 1, 2, 10, 12, 18, 23

Chapter 18: 3, 7, 9, 10, 21

Chapter 19: 1, 2, 3, 4, 15, 16, 17, 21

B&E Chapter 9: Q9-1a,b, 9-2, 9-3

B&E Chapter 23: Q23-1, 23-2, 23-3, 23-4,
23-5, 23-6

Chapter 22: 1, 5, 6, 7, 9, 10, 12, 16, 18

Notes:
1. Assigned Questions are from Ross, Fundamentals of Corporate Finance unless otherwise
indicated. Assigned questions based on the Ross chapters are highly recommended, but should
not be submitted as they do not count towards the formal assessment. Solutions to assigned
questions are available on Stream.
2. For Chapters 3 and 4, the additional questions (AQ) are listed on the following pages in this
Administration Guide.
3. For spreadsheet users, refer to the notes “Spreadsheet Applications using Excel” in Module 2.2 of
the Study Guide.
4. Details of the major assignment will be made available on the Stream website.
5. Answer the Questions (but not the Problems) from the Module 5.1 Study Guide Reading for
Brigham and Ehrhardt (2008) Financial Management: Theory and Practice.
AACSB
The College of Business has attained accreditation by the Association to Advance Collegiate
Schools of Business (AACSB International). This is the premier international accreditation for
business schools and signifies that a teaching institution has met demanding quality criteria.
As a small part of meeting these quality criteria, a small number of samples of marked
student work (assignments, tests, and exam scripts) are collected from a range of courses at
all levels and in all subjects (though only some courses are sampled each year). These
samples are rendered anonymous before they are stored because whose work it is, is not
important to the process that follows. Most often samples are used for moderation, such as
ensuring that marking or grading activity is of similar standard across all offerings of a paper,
for example. Accreditation will be important to you when you graduate as you can make use
of it on your CV to show that you gained your degree from a select business school with high
standards, so we hope you will be happy if your work just happens by chance to be used for
quality improvement in our college. If you'd like to know more about College of Business
quality management processes, please contact Jocelyn LeQuesne
(J.D.LeQuesne@massey.ac.nz).
Appendix 1: How to access Stream
Please refer to the web page below for a quick guide to using Stream:

http://www.massey.ac.nz/massey/fms/NCTL/Stream%20Documents/Stream%20Quick
%20Guides/Accessing%20Stream.pdf

You can also refer to such pdf file directly from our Stream website. This file is called ‘Access
stream.pdf’.

Appendix 2: Plagiarism policy

Using someone else’s ideas/or work without citing the source is plagiarism and is not
acceptable. The University Calendar states that there are strict penalties for plagiarism.
Plagiarism applies to any material: written, spoken, recorded, electronic, broadcasted,
visual, performance or other medium.

If you use the words of another author you must enclose them in quotation marks. You must
cite a page number and the full reference in the Reference List. When you have included the
ideas of another author you are required to reference the source of those ideas.

Contact the Student Learning Centre for information on how to avoid plagiarism.

Citing References
The reference system used should enable you to indicate the source of facts and opinions
without interrupting the flow of your argument, and it must enable a reader to check and
pursue these citations quickly and economically. These guidelines are based on the APA
(American Psychological Association) referencing system. APA (2001). Publication manual
(5th ed.). Washington, DC: American Psychological Association.

When a reference is made in the body of the assignment it is sufficient to mention the name
of the author, the year of publication, and the page number, e.g.:
“..it has been urged (Kotler, 1986, p.9) that …”, or
“..it has been urged by Kotler (1986, p.9) that …”
Cite electronic sources as for other texts. Where page numbers are not provided, use the
paragraph number, if available, preceded by the paragraph symbol or the abbreviation para.
If neither paragraph nor page numbers are visible, cite the heading and the number of the
paragraph following it to direct the reader to the location of the material.
“.. Myers (2000, ¶ 5) believes..,” or
“.. (Beutler, 2000, Conclusion section, para. 1)..”

Reference List

All references cited in the text must be reported in full standard bibliographical form under a
heading “References” at the end of the assignment.
The references should be arranged alphabetically by author’s surname. When listing
references, all lines except the first should be indented five spaces (typically one tab stop).
Note the use of italics (or underlining), capitalisation, punctuation and order of elements. For
a book, italics should be used for the title. For journal articles, the title of the journal, and the
volume number, should be italicised. If your word processor or printer cannot do italics,
underline these elements.

The preferred format for different types of publications is as follows:

Books

Heertje, A., ed. (1988). Innovation, technology, and finance. Oxford and New York:
Blackwell.

Pindyck, R. S., & Rubinfeld, D. L. (1998). Econometric models and economic forecasts (4th
ed.). Boston: Irwin/McGraw-Hill.

Periodicals

McShane, O. (2005, 14 October). Straight thinking: Who will pay the piper if councils call
mining tune? National Business Review, 22.

Occasional publications

Black, S. E., & Lynch, L. M. (2005). Measuring Organizational Capital in the New Economy,
IZA Discussion Paper 1524 (pp. 46). Bonn.

Henley, L. G. (2006). Corporate Venture Capital and Innovation. Tucson, Arizona: 2006 US
Assocation for Small Business Enterprise Annual Conference.

Internet

All references begin with the same information that would be provided for a printed source
(or as much of that information as possible). The web information is then placed at the end of
the reference. It is important to use “Retrieved from” and the “date” because documents on
the web may change in content, move, or be removed from a site altogether.

Counsell, K. G., & Evans, L. T. (2005, October). Essays on water allocation in New Zealand:
The way forward. Retrieved 6 April 2006, 2006, from
http://www.iscr.org.nz/navigation/research.html

Graham, J. R., Harvey, C. R., & Rajgopal, S. (2003). 2003 survey on financial reporting.
Retrieved 31 August, 2006, from http://faculty.fuqua.duke.edu/~jgraham/finrep/survey.htm