BØK 3632 Financial Strategy

BØK 3632 Financial Strategy

Course code: 
BØK 3632
Department: 
Finance
Credits: 
7.5
Course coordinator: 
Siv Jønland Staubo
Product category: 
Bachelor
Portfolio: 
Bachelor of Business Administration - Programme Courses
Semester: 
2018 Autumn
Active status: 
Active
Teaching language: 
Norwegian
Course type: 
One semester
Introduction

The essence of business administration includes corporate finance (i.e. investment and financing). Good knowledge within these areas is a necessary prerequisite to understand the economic content of investment and financing decisions, obtain decision-relevant information, discuss and assess alternatives, make correct decisions and convey relevant and useful information.
The aim of this course within the field of corporate finance is to provide the students with essential basic knowledge and skills, so that they can take part in discussions on problems in finance and carry out simple analyses within the field, make correct decisions and communicate the results of the analyses in a comprehensible manner.
The course Financial Strategy is mainly focused on financing issues and management of financial risks. By studying the main activities carried out in a company as financing projects over multiple periods, emphasis is placed on evaluating all economic effects of the project and of taking a long-term perspective. The course therefore starts with capital structure and dividend decisions, followed by an introduction to option pricing.

Learning outcomes - Knowledge

After completing the course, students are requiered to master tasks such as

  • Understand the concepts of debt and equity, such as bonds and equity issues:
  • Understand the concept of capital structure and the relationship between leverage and risk
  • Understand the meaning of perfect capital markets
  • Understand the basic elements in a valuation prosess
  • Understand the impact of taxes on valuation of assets
  • Understand the importance of dividend
  • Understand option pricing
Learning outcomes - Skills

Students having completed the course are requiered to conduct analytical exercises sush as:

  • Calculate the value of a bond and a share issue
  • Calculate impact on of debt-to equity ratios on risk in equity and the value of the company with or without debt v
  • Explain the importance of taxes for valuation of the assets
  • Explain the importance of the dividend
  • Explain theories contrary to the perfect capital markets
  • Explain the principles in the options pricing
Learning Outcome - Reflection

The course is based on Modigliani and Miller’s propositions for capital markets, and then explains challenges in real world. The student should be able to relate to the importance of these different theories for the business, the owners, the employees and the community. The student should be able to ask critical questions to all the aspects that have a bearing on a company's value. Moreover, the students, after this course, should be able to reflect on how a business should be run in order for it to be a positive contribution to society in general.

Course content
  1. Short nsummary of BØK 3423 Finans
  2. Risk. BMN kap. 1-2
  3. Risk and cost of capital. BMN kap. 3
  4. Financing - Long term financing. BMN kap. 4-5
  5. Capital structure and risk. BMN kap. 6
  6. Capital structure and value - Modigliani & MIller (no taxes). BMN kap. 7
  7. Capital structure and value - Modigliani & MIller (taxes). BMN kap. 8
  8. Adjusted present value. BMN kap. 9
  9. Valuation. BMN kap. 10
  10. Dividend. BMN kap. 11
  11. Options. BMN kap. 12
Learning process and requirements to students

The course is conducted by two lectures, one at the start of the course and a closing lecture. Each of these lectures are three hours.

There are nine weeks between the first and the last regular lecture. In these nine weeks, the student gets access to 30-40 videos undergoing course curriculum. These videos will replace traditional lectures in these nine weeks. In addition, students shall attend a two-hour session weekly, 18 hours in total. In the two-hour sessions relevant assignments, based on the videos and textbook will be reviewed, and understanding of the results and reports will be emphasized.

The student is responsible for obtaining all relevant course information provided by the lecturer in the first lecture, and which are not published on the course homepage / It's learning or syllabus. Use of spredsheet is recommended in the course.

E-Learning

In course delivery as online courses, lecturer will, in collaboration with the student administration, organize an appropriate course implementation, combining different learning activities and digital elements on the learning platform. The online students are also offered a study guide that will contribute to progression and overview. Total recommended time spent for completing the course also applies here.

Software tools
Software defined under the section "Teaching and learning activities".
Qualifications

Higher Education Entrance Qualification

Required prerequisite knowledge

The course Basic Financial Management from the Bachelor of Business Administration Program, Intreodution to Finance or equivalent..

Exam categoryWeightInvigilationDurationSupport materialsGroupingComment exam
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
BØK36321
Grading scale:
ECTS
Grading rules:
Internal and external examiner
Resit:
Examination every semester
100Yes3 Hour(s)
  • BI-approved exam calculator
  • Simple calculator
  • Interest table
Individual
Exams:
Exam category:Submission
Form of assessment:Written submission
Weight:100
Invigilation:Yes
Grouping (size):Individual
Support materials:
  • BI-approved exam calculator
  • Simple calculator
  • Interest table
Duration:3 Hour(s)
Comment:
Exam code:BØK36321
Grading scale:ECTS
Resit:Examination every semester
Exam organisation: 
Ordinary examination
Total weight: 
100
Workload activityDurationType of durationComment student effort
Teaching6Hour(s)
Review of assignments in plenary18Hour(s)
Self study136Hour(s)
Examination40Hour(s)Exam incl. preparations
Expected student effort:
Workload activity:Teaching
Duration:6 Hour(s)
Comment:
Workload activity:Review of assignments in plenary
Duration:18 Hour(s)
Comment:
Workload activity:Self study
Duration:136 Hour(s)
Comment:
Workload activity:Examination
Duration:40 Hour(s)
Comment:Exam incl. preparations
Sum workload: 
200

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.