MACC7016 Corporate Finance

Last updated on August 13, 2023

THE UNIVERSITY OF HONG KONG

FACULTY OF BUSINESS AND ECONOMICS

(MACC7016) (Corporate Finance)

GENERAL INFORMATION
Instructor Pingyang Gao, 高平阳

Office Telephone No.

KKL 1232 39102184
Email Consultation times:
pgao@hku.hk 11am-12pm Fridays
Pre-requisites MACC7001 Co-requisites
N/A
Course Code & Title Course Code & Title
Tutor
TBA

COURSE DESCRIPTION

This master-level corporate finance course further develops the basic concepts and tools essential for major
corporate financial decisions. We will focus on one tool (valuation) and two decisions financial managers make:
investing and financing. We will also highlight the connection of these decisions to the capital markets. Specific topics
include valuation of financial instruments, the relation of risk and return, investment criteria and capital budgeting,
cost of capital, and capital structure.

The course is intensive. I will spend half of the time completing the content of the textbook
and the other half analyzing multiple real-world cases. Students with weak background in
accounting and finance or with limited devotion to the course are NOT encouraged to take
the course.

COURSE OBJECTIVES

1. To further discuss basic concepts, tools and theories in corporate finance.

2. To train financial decision-making abilities in corporate and personal finance.
3. To prepare students for their real world corporate finance positions.

PROGRAMME LEARNING OUTCOMES

PLO1: Acquiring and internalizing accounting and business knowledge and skills
PLO2: Applying and integrating accounting and business knowledge
PLO3: Inculcating professionalism and leadership
PLO4: Developing a global outlook
PLO5: Mastering communication skills
COURSE LEARNING OUTCOMES
Aligned Programme
Course Learning Outcomes
Learning Outcomes

CLO1: Understand the fundamental financial management concepts and process. 1, 4

CLO2: Apply the time value of money concepts to security valuation and capital 1,2
budgeting.
CLO3: Evaluate managerial decisions in corporate investing, and financing activities. 1,2,3,4

CLO4: Develop leadership and team work skills in making corporate financial decisions 2,3,4,5

COURSE TEACHING AND LEARNING ACTIVITIES

Expected Aligned Course

Course Teaching and Learning Activities
contact Learning Outcomes
hour
 MACC7016 Corporate Finance
Last updated on August 13, 2023

T&L1. Lectures: Instructors will give lectures on major concepts and issues. 33 27.5%
T&L2. Assignments: There will be assignments to review and apply course 25 20.8%
materials.
T&L3. Self-Study 62 51.7%

Total 120 100%

COURSE ASSESSMENT METHODS

Assessment Methods Brief Description Weight Aligned Course

(Optional) Learning Outcomes
A1. Class attendance and participation 30% CLO 1, 2, 3

A2. Group Assignment/Project 30% CLO 1, 2, 3,4

A3. Final Exam 40% CLO 1, 2, 3

Total 100%
Lecture Notes: Hard copy of lecture notes will not be provided except under special circumstances. It is student’s
responsibility to download and print them from the course webpage at HKU Moodle.
Homework Assignments/Project: Group based assignment can promote active learning, bridge the gulf between
students and teacher, create a sense of community, and develop teamwork, communication and presentation skills.
Final Examinations: There will be a comprehensive final exam to test the students’ breadth and depth of the
understanding of the major concepts covered in the course and students’ ability to integrate and apply this knowledge.

STANDARDS FOR ASSESSMENT

Course Grade Descriptors

A+, A, A- Consistently demonstrated a thorough grasp of the subject with original or exceptionally astute
analysis and synthesis
B+, B, B- Frequently demonstrated a substantial grasp of the subject
C+, C, C- Some of the responses are clear, well organized but with insufficient elaboration
D+, D Answers and solutions contained unstructured but relevant and marginally interesting observations
F Little evidence of basic familiarity with the subject
Assessment Rubrics for Each Assessment
Grade Course Grade Descriptor
Assessment Task: Participation
A+, A, A- Active and excellent participation in discussions

B+, B, B- Good participation in discussions

C+, C, C- Moderate participation in discussions
D+, D Minimal participation in discussions
F No or distracting participation in discussions
Assessment Task: Group Assignments/Project
A+, A, A- Group assignment results that exhibit outstanding analytical and problem-solving skills
B+, B, B- Group assignment results that exhibit good analytical and problem-solving skills Group
assignment results that exhibit outstanding analytical and problem-solving skills
C+, C, C- Group assignment results that exhibit acceptable analytical and problem-solving skills
D+, D Group assignment results that exhibit marginally acceptable analytical and problem-solving
skills
F Group assignment results that exhibit inadequate analytical and problem-solving skills
Assessment Task: Final exam
A+, A, A- Exam results that exhibit outstanding analytical and problem-solving skills

B+, B, B- Exam results that exhibit good analytical and problem-solving skills

C+, C, C- Exam results that exhibit acceptable analytical and problem-solving skills

D+, D Exam results that exhibit marginally acceptable analytical and problem-solving skills

F Exam results that exhibit inadequate analytical and problem-solving skills

 MACC7016 Corporate Finance
Last updated on August 13, 2023

REQUIRED/RECOMMENDED READINGS & ONLINE MATERIALS

Required Textbook(s) -Fundamentals of Corporate Finance 13th Edition, by Ross, Westerfield, and Jordan, 2021

Online digital access to the book through Connect is required for the course. You will receive the
purchase and registration instructions through Moodle.

MEANS/PROCESSES FOR STUDENT FEEDBACK ON COURSE

Please fill out the SFTL questionnaire at the end of the course to provide feedback. Thanks you!

COURSE POLICY
Class Conduct
Students are required to attend all classes on time. If you miss a class, it is entirely your responsibility for what you have
missed. In case you have to leave the class early, please inform the instructor beforehand and leave quietly.

No use of mobile phone or chatting is allowed when the class is in session. Remember to turn off or mute the phone
before each session. The instructor has the discretion to give penalty in case of class misconduct.

Respect your instructors and your fellow students. Be considerate to others.

Academic Dishonesty

The University Regulations on academic dishonesty will be strictly enforced! Please check the University Statement on
plagiarism on the web: http://www.hku.hk/plagiarism/.

Academic dishonesty is any act that misrepresents a person’s own academic work or that compromises the academic
work of another. It includes (but not limited to) cheating on assignments or examinations; plagiarizing, i.e., representing
someone else’s ideas as if they are one’s own; sabotaging another’s work.

If you are caught in an act of academic dishonesty or misconduct, you will receive an “F” grade for the subject. The
relevant Board of Examiners may impose other penalty in relation to the seriousness of the offense.

ADDITIONAL COURSE INFORMATION

This course will utilize MOODLE.

The course syllabus is tentative and subject to revisions.
 MACC7016 Corporate Finance
Last updated on August 13, 2023

The Class Schedule

Class Topic Details Reading

Overview of Corporate — Financial managers Chapter 1,
Finance Cash Flows and — Major forms of business organizations 2, 3, 4
Accounting — Agency problems
1 — Financial markets
— Financial Statements
— Cash Flows
— Tax

Discount Cash Flows method — Simple vs. compound interest Chapter 5,

— PV, FV, N, PMT, Rate, APR, EAR 6, 7, 8
2 Bond and Stock Valuation — Annuity and Perpetuity
— Mortgage, savings, retirement applications

Risk and Return — Historical return and risk of different asset classes Chapter 12,
— CAPM and the security market line 13, 21, 22,
Risk management — Efficient Market Hypothesis and behavioral 23, 24, 25
3 finance
— Risk management through capital market
— Risk management through real options

— NPV and other investment criteria

Investment decisions: Capital
— Incremental cash flow identification and the role of
Budgeting
working capital Chapter 9,
4 — Scenario, sensitivity and break-even analysis 10, 11, 26
Mergers and Acquisitions as a
— Capital rationing
special investment decision
— M&A
Financing decisions: Capital — Cost of equity, cost of debt and WACC Chapter 14,
structure and raising capital — Capital Structure 16, 17
— Life cycle of a firm
5 — Venture Capital
— IPO and SEO
— Dividend and repurchase
Case Study Valuation
6

Case study Investment decision

Case Study Financing decision and IPO process

Case Study Valuation, governance, and corporate control

9

Case Study Risk management

10
11 Course Synthesis