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2017/2018  KAN-COECO1060U  Corporate Finance

English Title
Corporate Finance

Course information

Language English
Course ECTS 7.5 ECTS
Type Mandatory offered as elective
Level Full Degree Master
Duration One Semester
Start time of the course 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 19-02-2018

Relevant links

Learning objectives
To achieve the grade 12, students should meet the following learning objectives with no or only minor mistakes or errors:
  • 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, 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 42 confrontation hours and there is a high level of interaction between 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 24 April 2018. Please also remember to sign up through the online registration.
The exam in the subject consists of two parts:
Corporate Finance - midterm:
Sub exam weight30%
Examination formWritten sit-in exam on CBS' computers
Individual or group examIndividual exam
Assignment typeWritten assignment
Duration2 hours
Grading scale7-step scale
Examiner(s)One internal examiner
Exam periodAutumn
AidsLimited aids, see the list below:
The student is allowed to bring
  • Non-programmable, financial calculators: HP10bll+ or Texas BA II Plus
  • Language dictionaries in paper format
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.
Description of the exam procedure

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

Corporate Finance - final:
Sub exam weight70%
Examination formOral exam
Individual or group examIndividual exam
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 periodWinter
AidsOpen book: all written and electronic aids
The student is allowed to bring to the preparation room: Simple writing and drawing utensils, laptop/tablet as a reference book (NB: there are no electric outlets available), any calculator, books including translation dictionaries, compendiums, notes. PLEASE NOTE: Students are not allowed to communicate with others during the preparation time.
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. 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 will also be asked to relate his/her answers to other material from the curriculum.

Course content and structure

The first part of the course introduces students to modern corporate finance. The second part of the course provides students with a research based knowledge and understanding of core topics in corporate finance focusing on the implications of asymmetric information and agency conflicts. The following topics will be covered: Classical Modigliani-Miller propositions, the effect of taxation, optimal capital structure, corporate valuation, dividend policy, 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.

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
Feedback during the teaching period
The students will receive feedback in relation to the mid-term exam and in connection with student presentations. In addition, the students can receive more individual feedback in office hours.
Student workload
Teaching 42 hours
Preparation 105 hours
Examination (including preparation) 59 hours
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 19-02-2018