BØK 1322 Finance II
BØK 1322 Finance II
This course introduces students to topics in corporate finance such as the issuing process of corporate securities, the capital structure of firms, and the implications of financial structuring for the value of firms. The course presents a framework for analyzing firms’ financing and capital structure choices.
Theory is connected to real world problems by analyzing realistic cases using Excel. Students will hence both deepen their understanding and acquire useful skills for business.
Upon completion of the course, students should understand:
- The importance of capital structure: implications for risk, important characteristics of debt and equity and how to use it for financing, and decision to pay dividends.
- Importance of markets for the corporation’s capital structure decisions, including that these decisions cannot impact valuation in perfect markets, and importance of market efficiency.
- The importance of taxes for corporate decision making.
- Corporations risk management decision and the tools available to them, also in an international context.
Students having completed the course are required to satisfactorily conduct analytical exercises such as:
- Valuation of a corporation with and without debt
- Practical risk management using financial derivatives
- Computing the costs and benefits from merger and acquisition activity
The students should be able to understand the importance of the models' underlying assumptions. They should be able to discuss whether the assumptions are reasonable in the real world, and what may happen if the assumptions are violated. The students should also be able to see the relevance of the theory when confronted with real-world issues
Part I: Financing
- Long Term Financing
- Debt or Equity?
- Dividend Policy
- Valuation of a corporation: Capital budgeting and Adjusted Present Value (APV)
Part II: Topics in corporate finance
- Issuing Securities
- Derivatives and Risk Management
- Merger and Acquisition Strategy
The course includes 15 2-hour lectures, in-class exercises, and 6 hours of assignments supported by learning assistants. These 15 lectures are supported by videos. To stimulate a good learning environment, the students will actively participate to the course with questions, comments and discussion.
The course will make extensive use of Excel, including valuation of a corporation. Students are therefore strongly encouraged to complete the online course in Excel before this course starts.
Higher Education Entrance Qualification
Disclaimer
Deviations in teaching and exams may occur if external conditions or unforeseen events call for this.
Finance I
| Assessments |
|---|
Exam category: School Exam Form of assessment: Written School Exam - pen and paper Exam/hand-in semester: First Semester Weight: 100 Grouping: Individual Support materials:
Duration: 3 Hour(s) Exam code: BØK13221 Grading scale: ECTS Resit: Examination every semester |
| Activity | Duration | Comment |
|---|---|---|
Teaching | 30 Hour(s) | |
Feedback activities and counselling | 6 Hour(s) | Participating in problem-solving in class |
Student's own work with learning resources | 100 Hour(s) | |
Digital resources | 15 Hour(s) | Asynchronous digital learning material, including videos. |
Examination | 49 Hour(s) | Preparation for the final examination |
A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 7,5 ECTS credit corresponds to a workload of at least 200 hours.