GRA 6283 Company Law and Finance

GRA 6283 Company Law and Finance

Course code: 
GRA 6283
Department: 
Law and Governance
Credits: 
12
Course coordinator: 
Tore Bråthen
Øyvind Norli
Product category: 
Master
Portfolio: 
MSc in Law and Business
Semester: 
2019 Autumn
Active status: 
Active
Teaching language: 
Norwegian
Course type: 
One semester
Introduction

This course integrates corporate law and corporate finance. A corporation is a separate legal entity and can be viewed as a vehicle for making-, organizing-, and funding investment decision. The course gives an advanced treatment on Norwegian corporate law, which is completely harmonized with EU-law, with an emphasis on the regulation of the companies’ capital. In a limited liability corporation, shareholders have delegated investment decisions to the board of directors and an administration (the Chief Executive Officer, Chief Financial Officer, etc.).  The course will establish a framework for how an administration ought to make investment decisions on behalf of shareholders.

Norwegian Company Law is completely harmonized with EU Company law.

Learning outcomes - Knowledge

The students will acquire knowledge on:

  • the regulation of the companies’ capital
  • the importance of cash flow
  • the difference between systematic and unsystematic risk
  • the effect of diversification on risk and return
  • the Capital Asset Pricing Model
  • how market forces influences the cost of capital
  • principles of investment decisions
  • the link between Net Present Value and corporate value
  • the effect of leverage on expected return
  • the Weighted Average Cost of Capital
  • Corporate Social Responsibility (CSR) and the tradeoff between CSR and the principle of duty to make profit
Learning outcomes - Skills

The students will know how to:

  • operate within the legal framework of the regulation of the companies’ capital
  • do capital budgeting
  • compute the cost of capital
  • perform project decisions
  • do simple corporate valuations
General Competence

The students should be able to understand the regulation of the companies’ capital and discuss whether the theoretical frameworks for decision making presented in this course is invalidated when applied in a real world setting.

Course content

In this course description we are using the terms “The Limited Liability Companies Act” and “The Public Limited Liability Companies Act” to refer to “Lov om aksjeselskaper (aksjeloven, asl.)” and “Lov om allmennaksjeselskaper (allmennaksjeloven, asal.)”, respectively. Collectively we are referring to aksjeloven and allmennaksjeloven as “The Limited Liability Companies Acts”.

Corporate Law

1. The principle of duty to make profit in the Limited Liability Companies Acts, emphasizing the tradeoff between Corporate Social Responsibility (CSR) and the principle of duty to make profit.

2. Equity

Share capital/equity
The Limited Liability Companies Acts § 3-4 og § 3-5
The Limited Liability Companies Acts § 3-6
Overview of the regulations that aims to protect the companies’ capital

3. Holding companies and intra group transactions

The definition of a holding company in the Limited Liability Corporation Acts, ref. The Limited Liability Companies Acts § 1-3
Intra-group transactions, ref. The Limited Liability Companies Acts § 3-9
The Limited Liability Companies Acts § 8-7, § 8-8, § 8-9 og § 8-11
ref. The Limited Liability Companies Acts § 6-28 og § 5-21 and the articles of association

4. Minority squeeze outs and valuation of minority interests

5. Cash dividends

6. Shareholder Loan Agreements

7. Stock repurchases

8. Writing down the book value of common equity

9. Company dissolution

10. Important considerations when choosing organizational form

 

Corporate Finance

  1. Value and Capital Budgeting
    1. Discounted Cash Flow Valuation
    2. Net Present Value
    3. Making Investment Decisions
  2. Risk and Return
    1. Returns
    2. Measuring risk
    3. The Capital Asset Pricing Model
    4. Risk and Cost of Capital
  3. Capital Structure
    1. Introduction to Long Term Financing
    2. Capital Structure and Corporate Value
    3. Limits to the Use of Debt
  4. Corporate Valuation
Teaching and learning activities

Students will learn through regular lectures, case discussions and write-ups. The course lends itself to bringing up relevant topics discussed in the regular press.

 

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

Please note that while attendance is not compulsory in all courses, it is the student’s own responsibility to obtain any information provided in class.

Qualifications

All courses in the Masters programme will assume that students have fulfilled the admission requirements for the programme. In addition, courses in second, third and/or fourth semester can have specific prerequisites and will assume that students have followed normal study progression. For double degree and exchange students, please note that equivalent courses are accepted.

Exam categoryWeightInvigilationDurationSupport materialsGroupingComment exam
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
GRA 62831
Grading scale:
ECTS
Grading rules:
Internal and external examiner
Resit:
Examination when next scheduled course
50No 1 Week(s)Group ( 2 - 3)
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
GRA 62832
Grading scale:
ECTS
Grading rules:
Internal and external examiner
Resit:
Examination when next scheduled course
50Yes3 Hour(s)
  • Bilingual dictionary
  • Laws and regulations, including offprints of laws and law drafts
  • Compilation of tax laws
Individual
Exams:
Exam category:Submission
Form of assessment:Written submission
Weight:50
Invigilation:No
Grouping (size):Group (2-3)
Support materials:
Duration: 1 Week(s)
Comment:
Exam code:GRA 62831
Grading scale:ECTS
Resit:Examination when next scheduled course
Exam category:Submission
Form of assessment:Written submission
Weight:50
Invigilation:Yes
Grouping (size):Individual
Support materials:
  • Bilingual dictionary
  • Laws and regulations, including offprints of laws and law drafts
  • Compilation of tax laws
Duration:3 Hour(s)
Comment:
Exam code: GRA 62832
Grading scale:ECTS
Resit:Examination when next scheduled course
Type of Assessment: 
Ordinary examination
Total weight: 
100
Workload activityDurationType of durationComment student effort
Prepare for teaching22Hour(s)Preparation for class discussion of case (twice).
Self study180Hour(s)
Teaching72Hour(s)
Submission(s)43Hour(s)Group home exam.
Examination3Hour(s)
Expected student effort:
Workload activity:Prepare for teaching
Duration:22 Hour(s)
Comment:Preparation for class discussion of case (twice).
Workload activity:Self study
Duration:180 Hour(s)
Comment:
Workload activity:Teaching
Duration:72 Hour(s)
Comment:
Workload activity:Submission(s)
Duration:43 Hour(s)
Comment:Group home exam.
Workload activity:Examination
Duration:3 Hour(s)
Comment:
Sum workload: 
320

A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 12 ECTS credit corresponds to a workload of at least 320 hours.