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2018/2019  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
  • Ramona Westermann - Department of Finance (FI)
Main academic disciplines
  • Finance
Teaching methods
  • Face-to-face teaching
Last updated on 10-09-2018

Relevant links
Learning objectives
  • Apply capital budgeting techniques and perform valuations
  • Explain when and how taxes, agency problems, and asymmetric information affect capital structure, payout policy, and firm values
  • Explain the possible implications of agency problems and asymmetric information on further topics including financing choices, investment decisions, and executive compensation
  • Reflect on dynamic models examining issues such as capital structure and payout policy
  • Put corporate finance insights from research papers into context and perspective
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 June 1, 2017. Please also remember to sign up through the online registration.
Examination
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
The student will have access to
  • Advanced IT application package
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.
Description of the 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

“Corporate Finance” by Jonathan Berk and Peter DeMarzo, 4th edition, Pearson.
Last updated on 10-09-2018