ØABED3002 Corporate Finance Emneplan

We start the course with an introduction to basic theoretical elements needed to understand investment decision rules, corporate policy decisions, and capital budgeting/valuation. Then, we move forward to the topic of investment under uncertainty, which provides the main theoretical and methodological insights on portfolio selection, the capital asset pricing model (CAPM model), and the cost of capital. The topic of capital structure builds on the cost of capital to provide the understanding of optimal corporate policy decisions, in regards to capital structure, investment, and payout policy under the perfect capital markets assumption and in the presence of market imperfections (e.g., corporate tax rate, distress or bankruptcy costs). We also cover the interlinkages with operating decisions and other investment decisions of the firm by developing the intuition on working capital management and risk management. The last topic draws on all of the above to cover valuation with leverage and capital budgeting. This last topic provides the grounds for the ØABED3700 "Valuation" course.

Language of instruction is English.

None

After completing the course, the student should have the following overall learning outcomes defined in terms of knowledge, skills and general competence.

Knowledge

After completing this course, students will have

• basic knowledge of key topics in corporate finance including theories, tools, and methods within the field,
• understanding of the role of corporate finance in society.

Skills

After completing this course, students will be able to

• apply professional knowledge and relevant results from research to practical and theoretical issues in order to take informed decisions
• to reflect on their own professional practice (in finance or non-finance profiles)
• to find, evaluate, and refer to information and use it to shed light on basic finance issues
• to use basic professional tools and techniques

General competence

After completing this course, students will

• have insight into relevant professional and ethical issues related to finance,
• be able to plan and carry out varied work tasks and projects that extend over time, alone and as a participant in a group,
• be able to convey key theories, problems, and solutions both in writing, orally and through other relevant forms of expression, and
• be aware of new thinking and innovation trends present in the field.

The course is taught in-class/zoom/recorded lectures and students work on and discuss different assignments in groups and plenary sessions. Students are expected to play an active role in lectures and seminars. Students will also be required to discuss papers and course themes during lectures and seminars.

As a general idea, students will be asked to prepare some theoretical and/or practical material every meeting. Then, during the lectures, students are expected to actively participate and to generate discussion in the different learning activities (e.g., practical exercises, case/paper discussion, presentations) and should be prepared to work in teams as part of the learning process.

The following coursework requirements must have been approved for the student to take the exam:

• Coursework 1: Tools, excel templates. Students will take the tools proposed in the classroom and will adapt those tools to different setups in a practical excel exercise.

• Coursework 2: Assignments that comprise exercises and short case studies, small empirical analyses to deepen the understanding of the theories and apply them to real-world problems.

Both coursework requirements will be done in groups of 4-5 students (depending on class size).

All required coursework must be completed and approved by the given deadline for the student to take the exam. If one or more coursework requirements have not been approved, the student will be given one opportunity to submit an improved version by the given deadline.

The exam in the course is a supervised exam of 2 hours.

he following aids are permitted:

• Excel
• All handwritten and printed support material
• Calculator (see regulations for the use of calculators in the programme description)

Grade scale A - F

The exam papers are assessed by one internal and one external examiner.

At least 25% of the exam papers will be assessed by two examiners. The grades awarded for the papers assessed by two examiners form the basis for determining the level for all the exam papers.