ØABED4800 Advanced Corporate Finance and Research Methodology Emneplan

Corporate finance consists of the financial activities related to running a corporation with a focus on maximizing shareholder value. This course in advanced corporate finance looks at current research articles published in top academic journals to identify how companies implement corporate finance activities in practice.

The goal of this course is twofold. On the one hand, students should become familiar with advanced theories and empirical evidence related to corporate finance decisions, understand the assumptions, applicability, and the limitations of the results. On the other, this course also aims at making students capable of carrying out research projects on their own. We will therefore not only look at the empirical evidence produced in research articles but also analyze the methodology used in those papers and discuss why which method was used or should have been used.

Students will have the opportunity to participate in the research seminar series where distinguished researchers from around the world are presenting their newest work.

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

• Coursework 1: Futures 
• Coursework 2: Swaps
• Coursework 3: Options

All of the coursework requirements are submissions of approximately 2-3 pages, written individually. 

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.

None

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 about the differences between the characteristics of a corporation and other forms of organizing a business and how these characteristics affect investment, financing, and risk-taking policies of a business.
• advanced knowledge about how companies raise private and public capital, decide on capital structure, and implement valuations.
• advanced knowledge about how companies can engage in value enhancing strategies and complete mergers and acquisitions (M&As).
• advanced knowledge about how companies determine payout policies and executive compensation.
• advanced knowledge about empirical techniques used in contemporary academic research to test corporate finance theories and when to use them.

Skills

The student can

• review and discuss key concepts in corporate finance
• apply knowledge acquired and relevant theories to his/her work with his/her master's thesis
• use relevant empirical methods to carry out limited empirical research projects.

General competence

The student

• is able to analyze and propose solutions to contemporary corporate finance problems managers of companies face in their day-to-day business.
• can apply his/her knowledge and skills in new areas in order to carry out advanced assignments and projects.
• can communicate extensive independent work and master language and terminology of the academic field.
• can communicate about academic issues, analyses, and conclusions in the field, both with specialists and the general public.

The course is taught in plenary 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.

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

• Coursework 1: Students have to write summaries of two empirical and two theoretical research articles following the guidelines of how to read and summarize research articles handed out by the teacher. Each summary should be between one and two pages. One part of the papers can be freely chosen by the student, while the other part will depend on which external guest researcher is presenting his/her work in the finance research seminar. These assignments satisfy several goals at once. Students should become able to read, understand, and summarize research papers, as well as have an opportunity to dig deeper into areas that they are interested in and might write their master theses in. In addition, by participating in the research seminar students get a glimpse into the research production process.  
• Coursework 2: Students have to do three assignments related to the material taught in class in groups of up to five people. Each assignment has a maximum amount of 10 pages. The assignments comprise exercises and short case studies, small empirical analyses to deepen the understanding of the theories and apply them to real-world problems.

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 market for financial derivatives is one of the biggest in the world. The most important derivative securities are forwards, futures, options, and swaps. Derivatives are central instruments for companies when they deal with risk. This subject focuses on how companies and other institutions can reduce risk by using derivatives contracts.

Language of instruction is English.

ØABED3500 Investments

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 a wide knowledge of markets, trading and valuation of forwards, futures, options and swap contracts.
• is aware of the theories behind valuation models such as Cost of carry for futures and Binominal and Black-Scholes for options.
• has knowledge about how valuation models such as Cost of carry for futures and Binominal and Black-Scholes for options can be used for analyzing new problems.

Skills

The student can

• use existing theories and methods in derivatives pricing.
• reflect over own independent work on practical problems in valuing and trading derivatives contracts. 
• use valuation models such as Cost of carry for futures and Binominal and Black-Scholes for options independently.

General competence

The student

• is aware of the development and innovation of the use of derivatives contracts.
• can exchange own views on the use of derivatives contracts.

The course is taught in lectures.

The teaching is coordinated with ØABED4200.