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2014/2015  KAN-CASCO1008U  Risk Management and Corporate Finance

English Title
Risk Management and Corporate Finance

Course information

Language English
Course ECTS 7.5 ECTS
Type Mandatory
Level Full Degree Master
Duration One Semester
Course period Spring
Timetable Course schedule will be posted at calendar.cbs.dk
Study board
Study Board for MSc in Economics and Business Administration
Course coordinator
  • Jens Dick-Nielsen - Department of Finance (FI)
To be confirmed
Main academic disciplines
  • Finance
Last updated on 04-07-2014
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
Course prerequisites
Admission req.
Bachelor level
Risk Management and 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
Aids allowed to bring to the exam Limited aids, see the list below and the exam plan/guidelines for further information:
  • Additional allowed aids
  • Books and compendia brought by the examinee
  • Notes brought by the examinee
  • Allowed calculators
  • Allowed dictionaries
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

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.
Expected 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

Last updated on 04-07-2014