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2019/2020  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
Teaching methods
  • Face-to-face teaching
Last updated on 18-03-2020

Relevant links
Learning objectives
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
Prerequisites for registering for the exam (activities during the teaching period)
Number of compulsory activities which must be approved: 1
Compulsory home assignments
The student must get 1 out of 2 assignments approved in order to attend the
ordinary exam.

The assignments will be 2 cases which should be answered in groups of 4-5 students. The written solution to the case should not be more than 5 pages. Each group will receive written feedback on the solution that they provided.

Students will not have extra opportunities to get the required number of compulsory activities approved prior to the ordinary exam. If a student has not received approval of the required number of compulsory activities or has been ill, the student cannot participate in the ordinary exam.
If a student prior to the retake is still missing approval for the required number of compulsory activities and meets the pre-conditions set out in the program regulations, an extra assignment is possible.

The extra assignment is a 10 page home assignment that will cover the required number of compulsory activities. If approved, the student will be able to attend retake.
Examination
Risk Management and Corporate Finance:
Exam ECTS 7,5
Examination form Home assignment - written product
Individual or group exam Individual exam
Size of written product Max. 20 pages
Assignment type Written assignment
Duration Written product to be submitted on specified date and time.
Grading scale 7-point grading scale
Examiner(s) One internal examiner
Exam period Spring
Make-up exam/re-exam
Same examination form as the ordinary exam
Course content, structure and pedagogical approach

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
Description of the 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.

Written feedback on the mandatory cases.
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 18-03-2020