DRE 7009 Corporate Finance Theory

DRE 7009 Corporate Finance Theory

Course code: 
DRE 7009
Department: 
Finance
Credits: 
6
Program of study: 
Doktorgradsstudium
Course coordinator: 
Salvatore Miglietta
Product category: 
PhD
Portfolio: 
PhD Finance courses
Semester: 
2020 Autumn
Active status: 
Active
Teaching language: 
English
Course type: 
One semester
Introduction

This course is a rigorous introduction to modern theories of corporate finance. The first half of the course establishes foundational concepts, beginning with the neoclassical and tradeoff models, and then moving to agency problems and possibly asymmetric information. The second half of the course focuses on a select group of topics, including executive compensation, corporate governance, security design, financial contracting and the theory of the firm, with a particular focus on the organizational aspects of the subjects. Empirical research in corporate finance is covered in greater depth in Empirical Corporate Finance and in DRE 7016 Topics in Corporate Finance.

Learning outcomes - Knowledge

The goal of the course is to familiarize students with central theories underpinning research in corporate finance.

Learning outcomes - Skills

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General Competence

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Course content

PART I. Capital Structure: Debt versus Equity
1. Neoclassical Model and Tradeoff Model
2. Agency Problems & Asymmetric Information

PART II. Principal Agent theory
3. General P-A problem
4. Compensation/incentive contracts

PART III. TOPICS
5. Security design: financial contracting and optimality of debt contracts
6. Theory of the firm: incomplete contract approach
7. Allocation of authority/control
8. Stock ownership and managerial monitoring
9. Board independence
 

Teaching and learning activities

Weekly class meetings are organized around lectures that develop and discuss models and their empirical implications. Students are required to participate in the class through presentations of some of the assigned papers and discussions of the topics of the lectures. Homework will be assigned weekly or bi-weekly.

Software tools
No specified computer-based tools are required.
Additional information

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Qualifications

Enrollment in a PhD programme is a general requirement for participation in PhD courses at BI Norwegian Business School.
External candidates are kindly asked to attach confirmation of enrollment in a PhD programme when signing up for a course. Other candidates may be allowed to sit in on courses by approval of the course leader. Sitting in on a course does not permit registration for the course, handing in exams or gaining credits for the course. Course certificates or confirmation letters will not be issued for sitting in on courses.

Required prerequisite knowledge

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Exam categoryWeightInvigilationDurationSupport materialsGroupingComment exam
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
DRE 70091
Grading scale:
Point scale
Grading rules:
Internal examiner
Resit:
All components must, as a main rule, be retaken during next scheduled course
20No 1 Semester(s)Individual
Exam category:
Activity
Form of assessment:
Presentation
Exam code:
DRE 70091
Grading scale:
Point scale
Grading rules:
Internal examiner
Resit:
All components must, as a main rule, be retaken during next scheduled course
20No -Individual
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
DRE 70091
Grading scale:
Point scale
Grading rules:
Internal examiner
Resit:
All components must, as a main rule, be retaken during next scheduled course
50Yes3 Hour(s)
  • Simple calculator
  • Bilingual dictionary
Individual
Exam category:
Activity
Form of assessment:
Class participation
Exam code:
DRE 70091
Grading scale:
Point scale
Grading rules:
Internal examiner
Resit:
All components must, as a main rule, be retaken during next scheduled course
10No 1 Semester(s)Individual
Exams:
Exam category:Submission
Form of assessment:Written submission
Weight:20
Invigilation:No
Grouping (size):Individual
Support materials:
Duration: 1 Semester(s)
Comment:
Exam code:DRE 70091
Grading scale:Point scale
Resit:All components must, as a main rule, be retaken during next scheduled course
Exam category:Activity
Form of assessment:Presentation
Weight:20
Invigilation:No
Grouping (size):Individual
Support materials:
Duration: -
Comment:
Exam code:DRE 70091
Grading scale:Point scale
Resit:All components must, as a main rule, be retaken during next scheduled course
Exam category:Submission
Form of assessment:Written submission
Weight:50
Invigilation:Yes
Grouping (size):Individual
Support materials:
  • Simple calculator
  • Bilingual dictionary
Duration:3 Hour(s)
Comment:
Exam code:DRE 70091
Grading scale:Point scale
Resit:All components must, as a main rule, be retaken during next scheduled course
Exam category:Activity
Form of assessment:Class participation
Weight:10
Invigilation:No
Grouping (size):Individual
Support materials:
Duration: 1 Semester(s)
Comment:
Exam code:DRE 70091
Grading scale:Point scale
Resit:All components must, as a main rule, be retaken during next scheduled course
Type of Assessment: 
Continuous assessment
Grading scale: 
ECTS
Total weight: 
100
Student workload
ActivityDurationComment
Group work / Assignments
75 Hour(s)
Specified Learning Activities (including reading).
Student's own work with learning resources
75 Hour(s)
Autonomous Student learning (including exam preparation).
Teaching on Campus
30 Hour(s)
Sum workload: 
180

A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 6 ECTS credits corresponds to a workload of at least 160 hours.