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2017/2018  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
Start time of the course 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)
Main academic disciplines
  • Finance
Last updated on 14-12-2017

Relevant links
Learning objectives
To achieve the grade 12, students should meet the following learning objectives with no or only minor mistakes or errors: 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
Examination
Risk Management and Corporate Finance:
Exam ECTS 7,5
Examination form Written sit-in exam on CBS' computers
Individual or group exam Individual exam
Assignment type Written assignment
Duration 4 hours
Grading scale 7-step scale
Examiner(s) One internal examiner
Exam period Spring
Aids Limited aids, see the list below:
The student is allowed to bring
  • USB key for uploading of notes, books and compendiums in a non-executable format (no applications, application fragments, IT tools etc.)
  • Any calculator
  • Books (including translation dictionaries), compendiums and notes in paper format
The student will have access to
  • Access to CBSLearn
  • Access to the personal drive (S-drive) on CBS´ network
  • Advanced IT application package
At all written sit-in exams the student has access to the basic IT application package (Microsoft Office (minus Excel), digital pen and paper, 7-zip file manager, Adobe Acrobat, Texlive, VLC player, Windows Media Player). PLEASE NOTE: Students are not allowed to communicate with others during the exam : Read more about exam aids and IT application packages here
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 and discussions.

Development of individual and social skills (competencies)
The students will primarily develop their analytical skills through solving and discussing various exercises.
Feedback during the teaching period
Students are encouraged to ask questions at the lectures, at the exercises, or during office hours.

Exercises classes will feature a large number of exercises which will be explained at the whiteboard with inputs from the students. The students are encourage to have solved the exercises before the classes so that they can ask questions during the exercise classes.
Student workload
Lectures 100 hours
Exercises 70 hours
Exam 36 hours
Expected literature

Brealey, R. A., S. C. Myers and F. Allen (2016). Corporate Finance (12th Global edition). McGraw Hill. (We will use the newest edition of the book. We will not be using the online learning center called Connect Finance).
Selected academic articles.
Last updated on 14-12-2017