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2015/2016  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
Start time of the course Spring
Timetable Course schedule will be posted at calendar.cbs.dk
Study board
Study Board for Asian Study Programme
Course coordinator
  • Aleksandra Gregoric - Department of International Economics and Management (INT)
Main academic disciplines
  • Finance
  • Economics
Last updated on 09-12-2015
Learning objectives
To achieve the grade 12, students should meet the following learning objectives with no or only minor mistakes or errors: 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
Aids allowed to bring to the exam Limited aids, see the list below:
  • Allowed dictionaries
  • 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.
Description of the exam procedure

Individual 4-hour written (closed book) exam. No other written or technical aids are allowed at the exam, except from certain calculators specified by the course responsible) and dictionaries (financial dictionaries are not allowed). Cf. The Regulations for written tests at CBS. The exam is internal and the evaluation is made by one teacher alone.
 

IMPORTANT INFORMATION ABOUT CALCULATORS:

You are allowed to bring only non-financial calculators in the PCF exam! Bring any calculator of your choice! 

Financial calculators are not allowed! For clarity here is a list of financial calculators that are not acceptable:  

TI 83, 83 Plus, TI 84, 84 Plus, TI BA II plus are not acceptable.

TI89 is not a financial calculator to start with, however it allows the inserting of Financial Apps with the Apps function that is inbuilt, thus it will also not be allowed in the exam despite arguments whether you have or have not inserted applications!

We expect you to confer to the CBS code of honor in this request! 
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 09-12-2015