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2019/2020  BA-BIBAO3021U  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 BSc in Business, Asian Language and Culture
Course coordinator
  • Björn Preuss - Department of International Economics, Governance and Business (EGB)
Main academic disciplines
  • Finance
  • Economics
Teaching methods
  • Face-to-face teaching
Last updated on 25-06-2019

Relevant links
Learning objectives
At the exam the student should demonstrate that s/he can live up to the following learning objectives:
  • 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 on CBS' computers
Individual or group exam Individual exam
Assignment type Written assignment
Duration 4 hours
Grading scale 7-point grading scale
Examiner(s) Internal examiner and external examiner
Exam period Summer
Aids Limited 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
  • basic 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

 

 
Course content, structure and pedagogical approach

This course is an overview of the principles of corporate finance and is 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 corporate finance 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. In the end the students will get an additional overview about more advanced financial instruments such as options.
Description of the teaching methods
Mix of lectures, exercises and casework. Cases, when necessary, will be made available to students.
Feedback during the teaching period
Students can receive feedback during office hours and tutorial classes.

Feedback is further offered in response to your questions and work whenever feasible although please appreciate that there are often time constraints. We also encourage you to ask questions or make comments in class and form self-study groups to secure peer feedback on your work.
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 IBA courses in Microeconomics and Accounting, as well as the other courses at the 1st, 2nd and 3rd year.

 

Please note that this course is new and will be offered for the first time in spring 2021 in the new IBA structure following the IBA programme reform.
Expected literature

Main Text Book

  • Richard A. Brealey, Steward C. Myers, and Alan J. Marcus. Fundamentals of Corporate Finance. (latest edition) McGraw Hill

 

Please note: these reading materials are only tentative and changes may occur. Final literature lists will be uploaded on LEARN before the course begins. 

Last updated on 25-06-2019