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2021/2022  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
Teaching methods
  • Blended learning
Last updated on 21/12/2021

Relevant links
Learning objectives
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
Prerequisites for registering for the exam (activities during the teaching period)
Number of compulsory activities which must be approved (see section 13 of the Programme Regulations): 1
Compulsory home assignments
The student must get 1 out of 2 assignments approved in order to attend the
ordinary exam. The students work in groups of 3 or 4. For each assignment, the group hands in a report (their answers to the questions stated in the assignment) of at most 3 pages per student.

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
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) One internal examiner
Exam period Autumn
Aids Open book: all written and electronic aids, including internet access
Read more here about which exam aids the students are allowed to bring and will be given access to : Exam aids and IT application package
Make-up exam/re-exam Home assignment - written product
Size of written product: Please see text below
Assignment type: Written assignment
Duration: Written product to be submitted on specified date and time.
Description of the exam procedure

About make-up/re-take exam:

 

No max on pages, students have 4 hours to complete the assignment.

 

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, structure and pedagogical approach

The course focuses on three major decisions of corporations: the investment decision (i.e., where and when to invest a firm’s resources), the financing decision (i.e., how to finance a given investment), and the dividend decision (i.e., how much and when to pay out to shareholders). 
  
The following topics are treated: risk and the cost of capital, valuation and investment planning, real options, capital structure, credit risk, 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.
Description of the 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 receive explicit feed-back on their individual solutions to the mandatory assignments. The teacher will also provide a general solution proposal to these assignments and there will be extra lecture or exercise session where the solution will be discussed. The weekly office hour will be organized as an in-class consultancy lecture (lektiecafé), 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 23 hours
Preparation for exercise classes 42 hours
Assignments 25 hours
Final preparation for exam 13 hours
Exam 4 hours
Expected literature

Berk, J., P. DeMarzo (2020). Corporate Finance, 5th Edition (Global Edition). Pearson.

Selected articles.
Last updated on 21/12/2021