ØABED4001 Corporate Finance Emneplan

Corporate finance comprises the financial activities essential to running a corporation with a primary focus on value maximization. The natural starting point of this course is the development of a valuation framework that allows us to determine the value of company’s securities but also the financial implications of its decisions. With a basic unifying valuation framework at hand, we will analyze the core corporate finance decisions: investment choices, raising capital, payout policy, and also touch working capital management, risk management, and mergers and acquisitions. We will examine how the institutional environment (taxes, regulations, …), market frictions, and principal agent issues (adverse selection, moral hazard) affect a company’s financial activities. On this journey, we will see how to refine the valuation techniques as well as the corporate strategy to take these aspects into account. The course places great emphasis on relevant theories and their practical applications, drawing on relevant academic research and real-world corporate examples.

Language of instruction is English.

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

Knowledge

The student has

• advanced knowledge of key topics in corporate finance, including theories, tools and methods within the field.

• advanced knowledge about how companies raise private and public capital and decide on the capital structure.

• advanced knowledge about how companies can engage in value enhancing strategies and complete mergers and acquisitions (M&As).

• advanced knowledge about how companies manage their working capital and determine payout policies.

• a deep understanding of the role of corporate finance in society and its interrelations with other disciplines.

Skills

The student can

• review and discuss key concepts and theories in corporate finance.

• apply the knowledge acquired and relevant theories within financial management and work with complex practical and theoretical problem solving.

• analyze and relate critically to various sources of financial information and use these to structure and formulate professional reasoning.

• set the grounds to carry out limited empirical research projects under supervision (e.g., a sketch of the research proposal for the master thesis).

General competence

The student can

• analyze and propose solutions to contemporary corporate finance problems which managers of companies face in their day-to-day business.

• apply his/her knowledge and skills in new areas in order to carry out advanced assignments and projects.

• communicate extensive independent work and master language and terminology of the academic field.

• communicate about professional and academic issues, analyses, and conclusions in the field, both with specialists and the general public.

The course is based on a flipped classroom method. Students prepare some theoretical material from the main reference of the course at home before the class session each week (FLIP), while in;class/zoom/recorded lecture time (CZRL) is devoted to discussing main theoretical concepts, hands-on exercises (EXCEL), "real-world" cases (CASES), or discussions. These activities (and the deadlines of the course) are summarized in the "Weekly Plan", which is made available at Canvas before the course starts.

As a general idea, students will be asked to prepare some theoretical and/or practical material every week. 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 in order for the student to take the exam:

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

• Coursework 2: Practitioner Cases/Research Paper Analysis. Students will be asked to make a presentation of a "real-world" case or research paper. Students will present the main take-homes to the rest of the class. The presentation will last approximately 15 minutes.

• Coursework 3: Stylized Facts from Research Data. Students will be assigned a Stata database and will be asked to provide stylized facts (e.g., graphs) related to the topics covered in the lectures.

The purpose of the coursework requirements is to familiarize students with trending topics in corporate finance, get them familiarized with the main tools used in financial management, and to exercise financial data analysis and visualization.

All requirements will be done in groups of 4-5 students.

All required coursework must be completed and approved by the given deadline in order 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 school exam of 2 hours.

The following aids are permitted:

Calculator (see regulations for the use of calculators in the program description)

Excel

All handwritten and printed support material is allowed.

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

Students who have the subject ØABED3001 Corporate Finance in their bachelor's degree are not allowed to take this course.