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2011/2012  KAN-ASC_AS52  Risk Management and Corporate Finance

English Title
Risk Management and Corporate Finance

Course Information

Language English
Point 7,5 ECTS (225 SAT)
Type Mandatory
Level Full Degree Master
Duration One Semester
Course Period Spring
Time Table Please see course schedule at e-Campus
Study Board
Study Board for MSc in Economics and Business Administration
Course Coordinator
  • Gabriele Lepori - Department of Finance
Gabriele Lepori
Main Category of the Course
  • Finance
Last updated on 29 maj 2012
Learning Objectives
The objective of the course is to provide students with a basic knowledge of theories and models for corporations’ capital budgeting, financing decisions, investment decisions, hedging, and risk management.

At the exam the students must be able to:
Describe the various types of risk related to a corporation and how these impact the investment and financing decision
Be able to apply various techniques for valuation of projects and corporations taking the riskiness of these into account
Describe financial and real options and apply financial options for hedging and risk management
Prerequisite
Admission req. Bachelor level
The exam in the subject consists of two parts:
Risk Management and Corporate Finance:
Weight 25%
Assessment Written Exam
Marking Scale 7-step scale
Censorship No censorship
Exam Period February
Aids Please, see the detailed regulations below
Duration Please, see the detailed regulations below
Mid-term, multiple choice exam (2-hour multiple choice, no written aids), weight: 25%.
The multiple choice exam will take place in February.
Make-up/ re-exam takes place in April/May
Risk Management and Corporate Finance:
Weight 75%
Assessment Written Exam
Marking Scale 7-step scale
Censorship No censorship
Exam Period Spring Term
Aids Open Book, Written Aid is permitted
Duration 4 Hours
Individual 4-hour written exam, weight: 75%. Written and electronic aids allowed cf. ‘Rules for using electronic aids during written examinations’ and ‘Regulations for written tests at CBS’.The 4-hour written exam will take place in March. Make-up/ re-exam takes place in April/May
Examination
Mid-term exam: 2 hour multiple choice, closed book – weight: 25%.
Ordinary exam: 4-hour written open book exam – weight: 75%.
Course Content

The course contains the following core elements:
The relationship between risk and return and the Efficient Market Hypothesis
The valuation of investment projects and the effects of risk, agency problems, and asymmetric information on the allocation of capital
An overview of corporate financing and an introduction to executive compensation.
Corporate finance policy and payout policy
Financial and real options
Real options in a strategic perspective
Corporate risk management and hedging of financial and non-financial risk exposure

Teaching Methods
Research and theory based dialog lectures are combined with exercises, Excel calculations, and some cases – all of practical relevance. This way, the students will learn to apply theory and tools for analysis and decision making but also to be aware of potential pitfalls.

Involvement of the students is an important part of the learning principle. This is done through exercises, discussions, and presentations.

Development of individual and social skills (competencies)
The students will primarily develop their analytical skills through solving, presenting, and discussing various exercises.
Literature

Brealey, R. A., S. C. Myers and F. Allen (2006). Corporate Finance (8th edition). McGraw Hill.
Selected academic articles and articles from practitioners’ journals