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2011/2012  KAN-OE13  Corporate Finance

English Title
Corporate Finance

Course Information

Language English
Point 7,5 ECTS (225 SAT)
Type Mandatory
Level Full Degree Master
Duration One Semester
Course Period Autumn
Time Table Please see course schedule at e-Campus
Max. participants 25
Study Board
Study Board for MSc in Advanced Economics and Finance
Course Coordinator
  • Ken Bechmann - Department of Finance
Main Category of the Course
  • Finance
Last updated on 29 maj 2012
Learning Objectives
Students are required to:
  • Be able to apply capital budgeting techniques and perform basic valuations
  • Explain when and how taxes, risk management, agency problems, and asymmetric information affect the optimal capital structure, payout policy, and firm values
  • Explain the likely implications of agency problems and asymmetric information in other issues including IPOs, bank lending, equity issuance, ownership structure, investment decisions, risk management, and informationally efficient financial markets
  • Provide examples of models examining issues like payout policy and capital structure in a dynamic setup
  • Be able to apply theoretical insights in practical corporate finance contexts
Corporate Finance
The exam in the subject consists of two parts:
Midtterm exam:
Weight 30%
Assessment Written Exam
Marking Scale 7-step scale
Censorship No censorship
Exam Period Autumn Term
Aids Closed Book
Duration 2 Hours
The mid-term will be based on the content in lectures 1-5.
Final exam:
Weight 70%
Assessment Oral Exam
Marking Scale 7-step scale
Censorship Internal examiners
Exam Period December/January
Aids With time for preparation
Duration 20 Minutes
The student draws a question/topic and has 20 minutes to prepare his/her presentation. During the 20 minutes of preparation the student may use all written exam aids as well as the student's own calculator and computer. The student may be asked, for example, to present the main ideas in a relevant paper from the curriculum. The examination will focus on the specific question/topic that the student draws, but the student may also be asked to relate his/her answers to other relevant material from the curriculum.
Course Content

The course provides students with a firm knowledge and understanding of issues of relevance for optimal capital structure choice and corporate financial policy. The following topics will be covered: Classical Modigliani-Miller propositions and the effect of taxation, optimal capital structure and dividend policy with agency issues and asymmetric information, capital budgeting/real options issues, and capital structure choice in dynamic settings. The course is a fundamental finance course. It complements the courses on Asset Pricing Theory and Corporate Governance.

Teaching Methods
The format of the course is based on the following elements:
• Class lectures devoted to the fundamental theoretical issues
• Student presentations of relevant journal articles
• Case analysis which is participation oriented
• Class exercises.
Student Workload
SAT 225 hours
Further Information
Part of this course may also be taken as a Phd course for a limited number of Phd students.

The main textbook can be bought in the CBS bookstore, online at different places, and probably also used, if you like. The articles will be uploaded in LEARN in due time before class. All slides, exercises not in main textbook etc. used for lectures will be uploaded in LEARN before class. These slides will also be part of the required readings for the exam. In particular, the slides will clearly demonstrate what you should be focusing on when reading the main textbook or the assigned articles.