DRE 7009 Corporate Finance Theory

DRE 7009 Corporate Finance Theory

Course code: 
DRE 7009
Department: 
Finance
Credits: 
6
Course coordinator: 
Salvatore Miglietta
Course name in Norwegian: 
Corporate Finance Theory
Product category: 
PhD
Portfolio: 
PhD Finance courses
Semester: 
2024 Autumn
Active status: 
Active
Level of study: 
PhD
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 courseleader. 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.

Disclaimer

Deviations in teaching and exams may occur if external conditions or unforeseen events call for this.

Required prerequisite knowledge

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Assessments
Assessments
Exam category: 
Submission
Form of assessment: 
Submission PDF
Exam/hand-in semester: 
First Semester
Weight: 
30
Grouping: 
Individual
Duration: 
1 Semester(s)
Exam code: 
DRE 70092
Grading scale: 
ECTS
Resit: 
Examination when next scheduled course
Exam category: 
School Exam
Form of assessment: 
Written School Exam - pen and paper
Exam/hand-in semester: 
First Semester
Weight: 
70
Grouping: 
Individual
Support materials: 
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
Duration: 
3 Hour(s)
Comment: 
Final written exam
Exam code: 
DRE 70093
Grading scale: 
ECTS
Resit: 
Examination when next scheduled course
Type of Assessment: 
Ordinary examination
All exams must be passed to get a grade in this course.
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
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.