English   Danish

2014/2015  BA-BASPO1001U  Principles of Corporate Finance

English Title
Principles of Corporate Finance

Course information
Language English
Course ECTS 7.5 ECTS
Type Mandatory
Level Bachelor
Duration One Semester
Course period Spring
Timetable Course schedule will be posted at calendar.cbs.dk
Study board
Study Board for Asian Study Programme
Course coordinator
  • Evis Sinani - Department of International Economics and Management (INT)
Main academic disciplines
  • Finance
  • Economics, macro economics and managerial economics
Last updated on 17-08-2014
Learning objectives
At the end of the course the students should be able to:
  • Define and discuss key concepts from theories and models introduced and discussed in the course.
  • Apply the correct financial techniques to a given issue.
  • Calculate and perform the analysis from the perspective of a chief financial officer in decision-making.
  • Interpret the results of the analysis with respect to the efficiency of decision making.
Examination
Principles of Corporate Finance:
Exam ECTS 7,5
Examination form Written sit-in exam
Individual or group exam Individual
Assignment type Written assignment
Duration 4 hours
Grading scale 7-step scale
Examiner(s) One internal examiner
Exam period Summer Term
Aids allowed to bring to the exam Limited aids, see the list below and the exam plan/guidelines for further information:
  • Allowed calculators
Make-up exam/re-exam
Same examination form as the ordinary exam
If the number of registered candidates for the make-up examination/re-take examination warrants that it may most appropriately be held as an oral examination, the programme office will inform the students that the make-up examination/re-take examination will be held as an oral examination instead.
Course content and structure

This course is an overview of the principles of corporate finance andis designed for undergraduate students who have no prior knowledge of corporate finance. Importance is placed on techniques related to investment decisions and financial decisions made by companies. Financial managers in corporations work with other managers to identify investment opportunities, to analyze and value the opportunities and to decide whether and how much to invest, as well as decide how to raise the money to finance corporation’s investments.
Therefore we start with an introduction of what a corporation is, and describe the role of a corporation’s financial manager. We then proceed with how to measure corporate performance (value added, efficiency, profitability etc), since the main goal of corporations is maximizing the current market value.
Since companies invest in a lot of things such as tangible or intangible assets, the decision on capital outlays is among the most significant a firm will have to make. In introducing decision making on capital expenditure, first the students will be exposed to “time value of money” calculations and then proceed to the fundamentals of valuation of bonds and stocks, emphasizing present value techniques. These techniques will be also useful during capital budgeting decisions, which involve comparing the different investment criteria in the presence of capital shortage. After careful grounding in valuation practice and theory, the concepts of the cost of capital and capital structure will be examined, covering risk-return analysis in capital budgeting.
Teaching methods
Mix of lectures, exercises and casework. Cases, when necessary, will be made available to students.
Student workload
Teaching 36 hours
Preparation 166 hours
Examination 4 hours
Further Information

The course is designed for undergraduate students who have no prior knowledge of corporate finance. Therefore, the course is especially integrated with the ASP courses in Microeconomics and Accounting, as well as the other courses at the 1st, 2nd and 3rd year.
Expected literature

Main Text Book

  • Richard A. Brealey, Steward C. Myers, and Alan J. Marcus. Fundamentals of Corporate Finance. (latest edition) McGraw Hill.
Last updated on 17-08-2014