| Unit name | Principles of Finance |
|---|---|
| Unit code | ACCG20012 |
| Credit points | 20 |
| Level of study | I/5 |
| Teaching block(s) |
Teaching Block 4 (weeks 1-24) |
| Unit director | |
| Open unit status | Not open |
| Pre-requisites |
EFIM10002 Financial Accounting 1 and EFIM10004 Managerial Finance; or ACCG10052 Introduction to Accounting |
| Co-requisites |
None |
| School/department | School of Economics, Finance and Management |
| Faculty | Faculty of Social Sciences and Law |
The first half of this course provides a grounding in the pricing of financial securities issued by corporations and governments. Attention then turns to the nature and pricing of fixed income securities. After an introduction to the economics of choice under uncertainty, we move on to study equity markets and and the pricing of stocks. The term closes with an evaluation of whether security markets are efficient, in the sense that genuine economic profits are not available from trading bonds and stocks. In the second term we return to discounting as part of a more detailed analysis of the capital investment decision. We then investigate how to calculate discount rates by studying the components of the weighted average cost of capital; and the effect of capital structure on these components.
