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2025/2026  KAN-CEAPO1001U  Corporate Finance and Derivatives

English Title
Corporate Finance and Derivatives

Course information
Language English
Course ECTS 7.5 ECTS
Type Mandatory (also 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
Study board
Study Board of Finance, Economics & Mathematics
Course coordinator
  • Akash Raja - Department of Finance (FI)
Main academic disciplines
  • Finance
  • Accounting
Teaching methods
  • Face-to-face teaching
Last updated on 14-03-2025

Relevant links
Learning objectives
To achieve the grade 12, students should meet the following learning objectives with no or only minor mistakes or errors: 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 grows 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 and value mergers and acquisitions proposals.
Course prerequisites
This course is offered as an elective to incoming exchange students. It is a mandatory course for the MSc in Applied Economics and Finance. It is assumed that students have knowledge similar to the entry requirements for this program.

Students will be selected based on their application. Please send a 1-page motivational letter, a 1-page CV, and a grade transcript to ily.stu@cbs.dk before the registration deadline for elective courses.
Examination
Corporate Finance and Derivatives:
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 Winter
Aids Limited aids, see the list below:
The student is allowed to bring
  • USB key for uploading of notes, books and compendiums in a non-executable format (no applications, application fragments, IT tools etc.)
  • Any calculator
  • In Paper format: Books (including translation dictionaries), compendiums and notes
The student will have access to
  • Access to Canvas
  • Access to the personal drive (S-drive) on CBS´ network
  • 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

Contents

 

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, and mergers and acquisitions.
Research-based teaching
CBS’ programmes and teaching are research-based. The following types of research-based knowledge and research-like activities are included in this course:
Research-based knowledge
  • Classic and basic theory
Research-like activities
  • Analysis
Description of the teaching methods
The format of the course is based on lectures, cases, and exercises. Problem sets will be posted on CBSCanvas a week in advance.
Feedback during the teaching period
There will be weekly online quizzes on which the students will receive feedback both online and in class.
Student workload
Preparation 158 hours
Classes and Exercises 44 hours
Exam 4 hours
Expected literature
  • Jonathan Berk and Peter DeMarzo (2023): Corporate Finance, Global Edition, 6th Edition, Pearson. ISBN13 978-1292-44631-8. This ISBN13 number is for the version including Access Code for MyLab Finance and E-text, which I recommend.
  • Teaching presentations and notes uploaded on CBSCanvas.
  • Exercises and their solutions from classes.
Last updated on 14-03-2025