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2025/2026  KAN-CGMAI3011U  Graduate Corporate Finance

English Title
Graduate Corporate Finance

Course information
Language English
Course ECTS 7.5 ECTS
Type Elective
Level Full Degree Master
Duration Summer
Start time of the course Summer
Timetable Course schedule will be posted at calendar.cbs.dk
Min. participants 30
Max. participants 60
Study board
Study Board for Governance, Law, Accounting & Management Analytics
Programme Master of Science (MSc) in Economics and Business Administration - General Management and Analytics (GMA)
Course coordinator
  • Carsten Sørensen - Department of Finance (FI)
For academic questions related to the course, please contact course instructor Shlomi Ben Yehuda (sby.fi@cbs.dk).
Main academic disciplines
  • Finance
Teaching methods
  • Face-to-face teaching
Last updated on 03/11/2025

Relevant links
Learning objectives
To achieve the grade 12, students should meet the following learning objectives with no or only minor mistakes or errors:
  • Evaluate a firm/project, distinguish between accounting value, economic value and incremental value.
  • Using the theory related to risk and return, explain and show how risk affects the cost of capital.
  • Calculate the WACC by analyzing the risks involved in each component of the firm.
  • Know the different objectives of equity holders and debt holders, as well as the agency problems they imply.
  • Analyze the effect of leverage on bankruptcy risk, required return, yield spread and firms' choices.
  • Show the impact of performance-based compensation and its influence on firms and employees.
Course prerequisites
Completed social science Bachelor. Fundamentals in economics and management.
Examination
Graduate 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 Summer
Aids Limited aids, see the list below:
The student is allowed to bring
  • Any calculator
  • 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.
n/a
Course content, structure and pedagogical approach

This course covers firms' financial decisions, as in most cases they are at least as important as the operational decisions, for the success of these firms.
The first part of the course focuses on evaluating projects and estimating value of firms using the DCF method, along with understanding the differences between economic (or incremental) value and accounting value.
In the second part we explore the discount rate, used in the evaluation of firms: how it is calculated and its link to firms' risk.
The third part deals with capital structure, the tension between equity and debt. Specifically, we learn about raising money, payout policy, bankruptcy, and agency problems such as under investing and risk shifting.
 

Pre-course Activity:
1. Read PCF part 1 chapter 2 (or any alternative review and practice of NPV and discounting methods).
2. The pre-course activity file, including a few short articles to read before the course starts, is published at the end of May.
 

 

Class 1:Firm structure, objectives and historical overview. The value calculation: discounting and timing; PCF part 1.


Class 2&3: Valuating: firm value using the DCF method. The incremental value. Analysts' recommendations: theory and practice; PCF part 1.


Class 4&5:Interest, Risk and Return. Expected return, realized return and YTM. The CAPM model and market efficiency; PCF part 2,4.


Class 6. Capital structure without taxes; PCF part 5.

 

Feedback activity: an optional "take home mini exam".

 

Class 7. The different holders: raising money; PCF part 5,6,7.


Class 8&9. Bankruptcy, payout policy, agency problems and CEO's objective; PCF part 3,5,8.


Class 10. Capital structure with taxes, the advantage of issuing debt. Performance based compensation: an overview, fundamentals, advantages and disadvantages; PCF part 5,6.
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
  • Methodology
  • Models
Research-like activities
  • Development of research questions
  • Analysis
  • Discussion, critical reflection, modelling
Description of the teaching methods
Tests, lecture notes, case studies, in class examples, worksheets, excel spreadsheets, and articles from financial press, which will form the basis for the class discussions.
Feedback during the teaching period
An optional "take home mini exam" based on the material covered so far.
Student workload
Pre-course Activity 20 hours
Classroom attendance 30 hours
Preparation 129 hours
Feedback activity 7 hours
Examination 20 hours
Further Information

6-week course.

 

Pre-course Activity: The course coordinator uploads the pre-course activity on Canvas at the end of May. It is expected that students participate as it will be included in the final exam, but the assignment is without independent assessment and grading.

 

 
Expected literature

Mandatory readings:

 

Brealey, Myers, Allen, "Principles of Corporate Finance", 10th-14th edition (denoted by PCF)

 

"Event Studies in Economics and Finance", Mackinlay, 1997, Journal of Economic Literature

 

"Buys, Holds, and Sells: The Distribution of Investment Banks’ Stock Ratings and the Implications for the Profitability of Analysts’ Recommendations.", Barber et al., 2006, Journal of Accounting and Economics

 

"Conflict of Interest and the Credibility of Underwriter Analyst Recommendations", Michaely, Womack, 1999, The Review of Financial Studies
 
"Apple to return $130bn to shareholders", Apr 23 2014,  The Telegraph
 
"Good Timing: CEO Stock Option Awards and Company News Announcements", Yermack, 1997, Journal of Finance
 
"Management Turnover and Financial Distress", Gilson, 1990, Journal of Financial Economics

 

"Do Managers Withhold Bad News?", Kothari Et al., 2008, Journal of Accounting Research

 

Additional relevant readings:

 

Benninga, Mofkadi, "Financial Modeling" 5th edition, 2022
 
"Boys will be Boys: Gender, Overconfidence and Common Stock Investments", Barber ans Odean, 2001, the Quarterly Journal of Economics
 
"The Efficient Market Hypothesis and its Critics", Malkiel, 2003, Journal of Economic Perspective
 
"Analysts' poor predictions", April 16 2016, Barrons
 
"Buybacks, money well spent?", October 12 2014, Financial Times
 
"Financial Ratios and the Probabilistic Prediction of Bankruptcy", Ohlson, 1980, Journal of Accounting research
 
"Bonuses don't have that much to do with performance", June 3 2015, The Telegraph
 
"Netflix to issue $1.5 billion of junk bonds to finance its massive spending plans", April 24 2018, Marketwatch

 
Last updated on 03/11/2025