Corporate Finance

Postgraduate course

Course description

Objectives and Content

This course gives an introduction to key concepts and empirics in corporate finance. Some of the topics that will be covered are:
  • Basic financial concepts such as: present value, the opportunity cost of capital, investment decisions, risk and return and market efficiency.
  • The impact of corporate financing, including payout policy, on investment decisions and firm value.
  • Agency conflicts between shareholders, managers and debtholders.
  • Executive compensation and other systems designed to reduce the extent of agency conflicts.
  • Information asymmetries between managers and shareholders, and their impact on corporate financing and investment policies.
  • Raising capital
  • The implications of behavioural finance for corporate behaviour.
  • Market efficiency and event study methodology
  • Valuation of stocks
  • Rationales for and implications of merger and acquisition activity

Learning Outcomes

A student who has completed the course should have the following learning outcomes defined in terms of knowledge, skills and general competence:

Knowledge

The student

  • can explain basic financial concepts such as: present value, the opportunity cost of capital, investment decisions, risk and return and market efficiency.
  • understands the impact of corporate financing on investment decisions and firm value.
  • can explain option theory and valuation.
  • understands the functioning of bond markets and the valuation of bonds.
  • understands theories and evidence on executive compensation.
  • understands information asymmetries between managers and shareholders and their impact on corporate financing and investment policies.
  • understands the implications of behavioral finance for corporate behavior.
  • can explain rationales for and implications of merger and acquisition.

Skills

The student

  • can apply real options theory to investment decisions.
  • can identify agency conflicts between shareholders, managers and debtholders.
  • can explain corporate governance systems designed to reduce the extent of these agency conflicts.

Level of Study

 Master

Semester of Instruction

Irregular
Required Previous Knowledge
Access to the Course
Maste`s Programme in Economics, Professional Studies in Economics, Master's Programme in Information Technology and Economics, or equivalent.
Teaching and learning methods
 3 hours per week, over 12 weeks. 36 hours in total.
Compulsory Assignments and Attendance

One term paper (pass/fail).

Compulsory assignments that are not accepted on the first try, may be handed in a second time. To be able to get this opportunity, the student must have made a sincere effort the first time around; that is, the student must have tried to answer most of the assignment.

Approved compulsory requirements do not have time limits.

Forms of Assessment

 Written exam (4 hours)

The exam will be given in the language in which the course is taught. 
The exam can be submitted in English. It is also possible to submit in Norwegian, Swedish or Danish.

Grading Scale
 A-F
Assessment Semester

Assessment in teaching semester.

A resit exam is arranged for students with valid absence according to UiBs study regulations § 5-5.

If a resit exam is arranged, it is available for students with the following results/absences:

  • Medical certificate/valid absence
  • Interrupted exam
  • Fail/Not passed

If you have the right to take a resit exam and a resit exam is arranged for students with valid absence, you can register yourself in StudentWeb after January 15th/August 1st.

Course Evaluation
All courses are evaluated according to UiB's system for quality assurance of education.
Examination Support Material
  • Mathematical Formula Collection of K Sydsæter, A. Strøm and P. Berck or Mathematical Formulas for Economists of B Luderer, V. Nollau and K. Vetters.
  • Simple, non-programmable calculators without graphical display, in accorance with university guidelines.
  • The Department of Economics can conduct a sample of aids in the examination room.