Corporate Finance

Description

Introduction: The aim of this course is to provide the students with essential basic knowledge and skills with respect to corporate financial decisions. It provides an understanding of the fundamental financial problems faced by corporations and teaches how to carry out simple corporate financial analyses, make decisions and communicate the results of the analyses in a comprehensible manner. The course Corporate Finance is mainly focused on financing issues, that is, when and in what way should companies raise capital for their investment and operational activities. By studying the main activities carried out in a company as financing projects over multiple periods, emphasis is placed on evaluating all economic effects of a project with a long-term perspective and consequently being able to optimally make both investment and strategic decisions. With this goal in mind the course not only reviews the classical economic theories of frictionless markets and the optimal corporate decisions therein but also incorporates and analyses market frictions and how the optimal decisions are modified accordingly. Course content: Cost of capital - Financing - Capital structure decisions - Market imperfection and agency problems - Dividend policy - Mergers and acquisitions Learning outcomes - Knowledge: After taking the course, the students shall be able to explain key concepts and give an account of the tools used in analyses of corporate finance problems (these tools include methods, techniques, models, theories, etc. applied in the subject area). Some examples of the concepts that students shall be able to explain are: - Differentiation between the advantages and/or disadvantages of different financing instruments - Capital structure decisions in different tax regimes - How dividend decisions might affect firm value - The difference between a merger and an acquisition Learning outcomes - Skills: After taking the course, the students shall be able to (a) apply knowledge (i.e. concepts and skills) in analyses and discussions on corporate financial problems, (b) distinguish between relevant and irrelevant financial information about a corporation, and (c) give written answers to questions so that the readers understand the applied methods and conclusions. Examples: - When the tool is given, be able to apply the tool correctly - Based on simple situation descriptions, choose the right tool and apply it correctly - Based on more complex situation descriptions, be able to produce relevant information, link it to the suitable tool and apply the tool correctly General Competence: After taking the course, the students shall be able to ask critical questions and reflect on crucial assumptions and theories within the field of corporate finance. They shall be able to understand the general context in which the financial operations of a company take place and understand the effects on the company and its stakeholders of the various financial decisions that may be taken. Teaching and learning activities: The course will include a combination of lectures and plenary tutorials where solutions to exercises will be explained. Please note that whilst attendance is not compulsory, it is the students responsibility to obtain any information provided in class that is not included on the course homepage/itslearning or the text book. Students are recommended to use computer-based tools, e.g. spreadsheets. Such tools, however, are not allowed at the examination. Software tools: No specified computer-based tools are required. Qualifications: Higher Education Entrance Qualification Disclaimer Deviations in teaching and exams may occur if external conditions or unforeseen events call for this Required prerequisite knowledge: EXC 2910 Mathematics, EXC 2904 Statistics, EXC 2110 Basic Financial Management, or equivalent. Assessments: Assessments Exam category: School Exam Form of assessment: Written School Exam - digital Exam/hand-in semester: First Semester Weight: 100 Grouping: Individual Support materials: - BI-approved exam calculator - Simple calculator - Bilingual dictionary Duration: 3 Hour(s) Exam code: EXC36711 Grading scale: ECTS Resit: Examination every semester Type of assessment: Ordinary examination Total weight: 100 Student workload: Activity Duration Comment Teaching 36 Hour(s) Feedback activities and counselling 6 Hour(s) Review of assignments in plenary Prepare for teaching 118 Hour(s) Student's own work with learning resources 40 Hour(s) Sum workload: 200 Incoming exchange students at BI Norwegian Business School select courses from BI's official semester-specific exchange course lists. BI defines a full semester as 30 ECTS; bachelor courses are typically 7.5 ECTS each (4 per semester) and master courses are typically 6 ECTS each (5 per semester). Course availability, prerequisites, and timetabling are confirmed via BI's International Office and the Learning Agreement process.