English   Danish

2014/2015  KAN-COECO1060U  Corporate Finance

English Title
Corporate Finance

Course information
Language English
Course ECTS 7.5 ECTS
Type Mandatory
Level Full Degree Master
Duration One Semester
Course period Autumn
Timetable Course schedule will be posted at calendar.cbs.dk
Max. participants 50
Study board
Study Board for MSc in Advanced Economics and Finance
Course coordinator
  • Ken L. Bechmann - Department of Finance (FI)
Main academic disciplines
  • Finance
Last updated on 19-05-2015
Learning objectives
At the end of the course, the students are expected 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
  • Reflect on models examining issues like payout policy and capital structure in a dynamic setup
  • Put theoretical insights into perspective when applied in a practical contexts
Course prerequisites
This is a mandatory course for the MSc in Advanced Economics and Finance. It is assumed that students have knowledge similar to the entry requirements for this programme. The course has 44 confrontation hours and there is a high level of interaction betweem lecturer and students, and in general a high work load.

To sign up send a 1-page motivational letter, a 1-page CV, and a grade transcript to oecon.eco@cbs.dk no later than 25 June 2015. Please also remember to sign up through the online registration.
Examination
The exam in the subject consists of two parts:
Midtterm exam:
Sub exam weight30%
Examination formWritten sit-in exam
Individual or group examIndividual
Assignment typeWritten assignment
Duration2 hours
Grading scale7-step scale
Examiner(s)Internal examiner and external examiner
Exam periodAutumn Term
Aids allowed to bring to the examLimited aids, see the list below and the exam plan/guidelines for further information:
  • 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.
Description of the exam procedure

The mid-term will be based on the first part of the course.

Final exam:
Sub exam weight70%
Examination formOral Exam
Individual or group examIndividual
Duration20 min. per student, including examiners' discussion of grade, and informing plus explaining the grade
Preparation timeWith the listed preparation time: 20 Minutes
Grading scale7-step scale
Examiner(s)Internal examiner and external examiner
Exam periodDecember/January
Aids allowed to bring to the examLimited aids, see the list below:
During the 20 minutes of preparation the student may use all written exam aids as well as the student's own calculator and computer.
Make-up exam/re-exam
Same examination form as the ordinary exam
Description of the exam procedure

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 and structure

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, risk management, 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 and home exercises
Further Information

Part of this course may also be taken as a PhD course for a limited number of PhD students.
Expected literature

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.
Last updated on 19-05-2015