Investment Banking and Project Finance

Course aim

To provide an understanding at an intermediate level of the principles and practices underlying investment banking and project finance. To develop an analytical attitude towards and ability with the application of basic principles of finance to project evaluation.

Course content

Principles of finance: risk aversion, diversification, signalling, market efficiency, risk-return trade-off, options.
Finance function of the firm: goals and financial objectives, financial policy and strategies, corporate plan, treasury.
Valuation techniques and models: debt models; equity models, unlisted share valuation, methodologies, case studies.
Modern portfolio theory: mean-variance model, single-index model, capital asset pricing model, applications to financial management.
Acquisition of funds: intermediate and long term; debt, equity, leasing, hybrid forms.
Theory and practice of capital structure: traditional, M & M, CAPM approaches; taxation and bankruptcy; incentive issues and agency costs; signalling; making decisions in practice.
Theory and practice of dividend policy: traditional, M & M, CAPM approaches, taxation (classical, imputation); signalling; linkage to capital structure; making dividend policy in practice.
Required rate of return: cost of capital of the firm; divisional required returns.

Textbook(s)

Brealey, R Myers, S and Allen F 2006, Corporate Finance, 8, McGraw-Hill International

Prerequisite(s)

Subject Area & Catalogue Number	Course Name
Group 1
BANK 2007	Business Finance
Group 2
BANK 2005	Finance and Investment

Students to choose between Group 1 and Group 2 for their pre-requisites.

Corequisite(s)

Nil

Teaching method

Component	Duration
INTERNAL, OFFSHORE, HONG KONG BAPTIST UNIVERSITY
Lecture	2.5 hours x 8 days
Tutorial	10 hours x across 14 weeks
External (Online discussion)	2 hours x 15 weeks
INTERNAL, OFFSHORE, TAYLOR'S BUSINESS SCHOOL
Lecture	2 hours x 14 weeks
Tutorial	2 hours x 14 weeks
External (Online discussion)	2 hours x 15 weeks

Note: These components may or may not be scheduled in every study period. Please refer to the timetable for further details.

Assessment

Group empirical assignment, Individual quantitative assignment (due week 3), Open Book Examination

Fees

EFTSL*: 0.125
Commonwealth Supported program (Band 4C)
To determine the fee for this course as part of a Commonwealth Supported program, go to:
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Fee-paying program for domestic and international students
International students and students undertaking this course as part of a postgraduate fee paying program must refer to the relevant program home page to determine the cost for undertaking this course.

Non-award enrolment
Non-award tuition fees are set by the university. To determine the cost of this course, go to:
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* Equivalent Full Time Study Load. Please note: all EFTSL values are published and calculated at ten decimal places. Values are displayed to three decimal places for ease of interpretation.