| Learning objectives |
At the exam the students must be able to:
- Describe the various types of risks 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 options and apply financial options for
hedging and risk management.
- Describe real options and the roles of real options in project
valuation.
- Demonstrate an understanding of a firm’s payout policy and of
mergers and acquisitions.
- Explain the various ways by which corporations, including
multinational corporations, obtain the information that is needed
for the investment and financing decision.
|
| Examination |
|
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 |
Spring Term and August, the regular exam takes
place in March/April. The make-up and re-examination takes place in
August. |
| Aids allowed to bring
to the exam |
Limited aids, see the list below and the exam
plan/guidelines for further information:
|
| 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.
The Make-up and Re-examination takes
place according to the same rules as the regular
exam.
|
Description of the exam
procedure
Written 4-hour open book exam, graded by internal examiner on
the 7-point scale. The make-up and re-examination takes place
according to the same rules as the regular examination. Exam aids:
Students are allowed to bring textbooks, lecture notes and
dictionaries. Electronic devices (Laptop and Personal Computers
etc.) are not allowed.
|
|
| Course content and structure |
|
This is an introductory course in finance focusing on corporate
applications in the international environment. It covers the basic
theories of interest rates, valuation of streams of cash flows,
pricing of risk, and it draws practical implications for capital
structure, project valuation, financing, and risk management.
More specifically, the course contains a basic introduction to
topics such as:
- The main characteristics of corporations
- The relationship between accounting information and the
information analysed in corporate finance
- Interest rates and the time value of money
- The valuation of bonds and stocks
- The investment decision
- The financing decision including capital structure theory and
the cost of capital
- Payout policy
- Mergers and acquisitions
- International financial mangement and capital budgeting
- Financial and real options
- Risk management
Thereby, the courseeflects the BSc IB program learning goals in
the following way:
Practical Application of Theory
The course includes many exercises and cases illustrating the
practical application of theory. In particular, this is achieved
both through lectures (illustrating practical applications) and
assigned readings from The Economist.
Relation to a Business or an Institutional Setting
Several aspects of different types of financial markets are
examined including public versus privately owned companies and
various types of providers of capital (investors).
Relation to International Business or Economics
The international perspective is taken in connection with many of
the topics covered during the course especially including mergers
and acquisitions, financial management and capital budgeting, and
risk management. Several examples are looking at multinational
firms.
Research Based Teaching
The curriculum includes articles that summarize several research
papers and ties such research to the practical use of the theoretic
methodologies introduced in the course. Furthermore, evidence from
several empirical studies is discussed during the
course.
|
| Teaching methods |
| The class time will be devoted to a combination
of lectures, discussions of different exercises and minor cases.
Exercises and cases will be home-work assignments during the
course. They will not be graded but discussed in class. The
material is large and well explained in the book. Therefore,
students are expected to study parts of the material on their own
and, as a minimum, to have read through the material and tried to
solve exercises/cases assigned as home-work in advance. |
| Student workload |
| Lecture hours |
42 hours |
| Class and exam preparation |
183 hours |
|
| Expected literature |
|
Brealey, Myers and Marcus, Fundamentals of Corporate
Finance, 7th edition (or newer, if available at start of
course), (Mc Graw Hill International Edition).
Other readings will be made available on Learn. These readings will
at least include the following articles from The
Economist:
- “The grand illusion”, March 5th 2009
- “Diversification”, October 7th 2009
- “Taking stock”, June 5th 2003
- “Debt is good for you”, January 25th 2001
- “Dividends’ end”, January 10th 2002
- “From buy-backs to sell-backs”, June 19th 2008
- “Synergy”, August 27th 2009
- “The age of hostility”, September 15th 2009
“Keeping all options open”, August 12th 1999
Please note, minor changes might occur. The teacher will
upload the final reading list to Learn two weeks before the course
starts.
|
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