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2017/2018  KAN-CFIVO1002U  Corporate Finance

English Title
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 Autumn
Timetable Course schedule will be posted at calendar.cbs.dk
Study board
Study Board for MSc in Economics and Business Administration
Course coordinator
  • Kristian Miltersen - Department of Finance (FI)
Main academic disciplines
  • Finance
Last updated on 30-05-2017

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 aim of the course is to provide students a thorough understanding of central issues in corporate finance and of models that are useful for analyzing such issues in a structured manner. At the end of the course, students should be able to:
  • Analyze the profitability of corporate investment opportunities with the purpose of supporting capital budgeting decisions
  • Explain the different funding options for a firm at its different stages as it growths from a startup to a public company taking into account the possible funding sources and optimal capital structure decisions considering, e.g., tax effects and potential bankruptcy costs
  • Analyze the dividend policy of the firm
  • Analyze how corporate decisions are influenced by agency problems and explain how agency problems can be countered.
  • Apply option pricing theory to analyze firms capital structure, to price debt and equity, and to analyze investment opportunities
  • Analyze leasing opportunities
  • Analyze and value mergers and acquisitions proposals
Examination
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) Internal examiner and external examiner
Exam period Autumn
Aids Open book: all written and electronic aids, including internet access
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 focuses on three major decisions of corporations: the investment decision, or where to invest a firm’s resources; the financing decision, or how to finance a given investment; and the dividend decision, or how much cash to return to shareholders. 
  
The following topics are treated: risk and the cost of capital, valuation and investment planning, real options, capital structure, dividend policy, risk management, agency costs and benefits, mergers and acquisitions.

 

The course focuses on the themes related to Chapters 14 to 28 of the textbook.  Students are encouraged to familiarize themselves with the topics related to the first part of the book (I.e., Chapters 1-13) before the course starts.  These topics are included in most bachelor degree corporate finance courses.  The first lecture of the course will give a short overview of the topics from the first part of the book which we need for the rest of the course.
Teaching methods
Lectures, cases and exercices.
Feedback during the teaching period
Students are strongly encouraged to actively take part of both the lectures and the exercise sessions by contributing with questions and comments. The teacher will do his best to give appropriate feed-back. In addition, students will have two opportunities (around week two and week four) to hand in written solution proposals to assigned exercises upon which they will receive explicit feed-back on their individual solutions. The teacher will also provide a general solution proposal to these exercises and there will be extra exercise sessions where the solutions will be discussed. The weekly office hour will be organized as an in-class consultancy lecture (lektie café), where students can come and work on their exercises, ask questions on an individual basis and thereby get individual feed-back.
Student workload
Lectures 33 hours
Preparation for lectures 66 hours
Exercise classes 14 hours
Preparation for exercise classes 70 hours
Exam 4 hours
Final preparation for exam 19 hours
Expected literature

Berk, J., P. DeMarzo (2013). Corporate Finance, 4th Edition (Global). Pearson.

Selected articles.
Last updated on 30-05-2017