Singapore Institute of Management
School of Economics, Finance, & Marketing
RMIT University
College of Business
BAFI1012 Business Finance
Course Guide
Semester 1 2016
SIM Campus
RMIT Coordinator
Dr. Michael Gangemi
Email: michael.gangemi@rmit.edu.au
1
Introduction
The theory of finance stems from the broad area of applied economics. Over the past thirty or so years
extensive research and theoretical developments have resulted in the emergence of this discipline as a science
in its own right. Today, the theory of finance is a field that equips the individual with techniques and skills that
ensure the objective analysis and evaluation of alternatives, resulting in effective financial decision-making.
These techniques and skills are applicable in a number of sectors of our economy, namely financial markets
(including financial products such as derivative instruments), financial institutions and the financial management
of companies.
The theory of finance plays a significant role in the area of business, or corporate, finance. The effective
financial management of firms, large or small, private or publicly listed, is paramount for the wellbeing of any
economy. However, not only does its importance lie in its benefit to the economy as a whole, but it is vital that
financial managers are capable of developing sound financial policies for the benefit of the firm itself and its
owners, the shareholders. Financial managers must have a sound framework that will provide the analytical
tools to competently evaluate alternatives and make objective decisions both in the short term and in the long
term. Investment options and financing choices must be analysed and assessed using techniques that have a
solid theoretical base.
Business Finance provides an introduction to some of the key skills required for good financial management. It
introduces financial concepts and issues that will provide the necessary guidelines to solve many corporate
finance problems. It also introduces some of the more important theories in modern finance to provide a
substantial grounding in the discipline.
Business Finance is a second year course and consequently is taught on the assumption that students have an
understanding of the basic concepts, principles and analytic techniques found in the introductory courses in the
fields of statistics and microeconomics.
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