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2024/2025  BA-BIBAO3021U  Principles of Corporate Finance

English Title
Principles of Corporate Finance

Course information
Language English
Course ECTS 7.5 ECTS
Type Mandatory (also offered as elective)
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, Goverment and Business (EGB)
Main academic disciplines
  • Finance
  • Economics
Teaching methods
  • Blended learning
Last updated on 21-11-2024

Relevant links
Learning objectives
At the end of the course the students should be able to:
  • 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.
Course prerequisites
The course sets a basic knowledge of one of these fields, managerial accounting, accounting or controlling as well as knowledge in excel as prerequisite. If the requirement is not fulfilled then the knowledge has to be obtained in parallel to the course.
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
  • An approved calculator. Only the models HP10bll+ or Texas BA ll Plus are allowed (both models are non-programmable, financial calculators).
  • 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
The number of registered candidates for the make-up examination/re-take examination may warrant that it most appropriately be held as an oral examination. The programme office will inform the students if the make-up examination/re-take examination instead is held as an oral examination including a second examiner or external examiner.
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. We place importance on techniques related to investment decisions and financial decisions made by companies. Financial managers in corporations work with other managers to identify investment opportunities, 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 the corporation’s investments.

 

Therefore, we start with an introduction to 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 of more advanced financial instruments such as options.
Description of the teaching methods
A mix of lectures, exercises, and casework is held both online and in the classroom. Cases, when necessary, will be made available to students. The course is designed as a blended learning course. With this, some lectures and exercises will be online and others will be on campus. Students will furthermore have access to additional digital learning elements such as quizzes, discussion forums, or podcasts if applicable.
Feedback during the teaching period
Students receive continuous feedback in the exercise sessions where they are asked to apply concepts of corporate finance. During class, we discuss concepts, and students are actively involved in the discussion giving them the opportunity to get direct feedback on their way of thinking about corporate finance theories and concepts.

Throughout the application of quizzes and discussion forums in canvas, the students get after making a quiz or contributing to a discussion direct feedback from the teacher or the system. In the case of pre-recorded videos using the panopto software, we incorporate related questions with direct feedback after the answer submission.

The exercises, quizzes, and discussions are linked to some of the learning objectives of this course, which means that feedback activities can help you familiarize yourself with the assessment method of the course as well as provide you with a clear indication of the standards expected from your work. Further feedback by teachers is offered in response to questions by individual students or groups. Students are at all times able to reach the teacher by email to ask questions or book meetings if needed.
Student workload
Lectures 30 hours
Exercises 12 hours
Preparation (i.e. hours spent for reading, group work, etc.) 160 hours
Examination 4 hours
In total 206 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 of IBA.

 

Please note that this course will be discontinued and run for the first last time in Spring 2027. The last exam will be offered in Summer 2028. See the programme regulations for transition notes.

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 CANVAS before the course begins. 

Last updated on 21-11-2024