FIN 3521 Corporate Finance

FIN 3521 Corporate Finance

Course code: 
FIN 3521
Department: 
Finance
Credits: 
7.5
Course coordinator: 
Knut Sagmo
Product category: 
Bachelor
Portfolio: 
Bachelor of Finance - Programme Courses
Semester: 
2019 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 in corporate finance is to provide the students with essential 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 focuses mainly on capital structure and dividend decisions, followed by an introduction to option theory, risk management and mergers and acquisitions.

Learning outcomes - Knowledge

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

  • Understand the concept of capital structure, the relationship between debt and equity
  • Understanding the relationship between leverage and risk
  • Understand the meaning of perfect capital markets
  • Understand the meaning of taxes on the valuation of assets
  • understand the importance of dividend
  • Understanding option pricing
  •  
Learning outcomes - Skills

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

  • Calculate the debt-to-equity ratio’s impact on cost of equity
  • Calculate the value of the company with and without debt
  • Explain the impact of taxes on valuation of the assets
  • Explain the importance of the dividend
  • Explain the principles of options
General Competence

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
  • Capital Structure: Basic concepts
  • Capital Structure: Limits to the use of debt
  • Valuation and capital budgeting for the levered firm
  • Dividends and other payouts
  • Equity financing
  • Debt financing
  • Options and corporate finance
Teaching and learning activities

The course builds around 45 lecture hours, mandatory work assignments, individual reading of assigned chapters from the text, and independent work on the end-of-chapter problems. Conduct of class and teaching style assumes students have prepared by reading the material lectured on, and (ii) have satisfied the required prerequisites.

Coursework requirements (Mandatory)
During the course, three work assignments are given. The assignments are distributed electronically on It's learning. Aswers to the assignments problems are to be submitted electronically. Two out of the three assignments must be passed in order to sit for the  final exam given at the end of the lectures series. Administrative details regarding the mandatory work assignments will be provided in class.

Feedback on the assignment problems is provided in two ways:

  • It's learning sums up and automatically returns to students their overall score upon submission of the answers.
  • A review of the assignment problems is given during the first class-meet following each assignment.

It is recommended to use spreadsheets for solving the three mandatory assignments.

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

Re-sit examination
Students that have not gotten approved the coursework requirements, must re-take the exercises during the next scheduled course.

Students that have not passed the written examination or who wish to improve their grade may re-take the examination in connection with the next scheduled examination.

Qualifications

Higher Education Entrance Qualification.

Required prerequisite knowledge

BØK 3423 Finance or equivalent.

Mandatory courseworkCourseworks givenCourseworks requiredComment coursework
Mandatory32In order to sit for the final exam, students must obtain approval of minimum two of three assignments during the course. See Learning process and workload.
Mandatory coursework:
Mandatory coursework:Mandatory
Courseworks given:3
Courseworks required:2
Comment coursework:In order to sit for the final exam, students must obtain approval of minimum two of three assignments during the course. See Learning process and workload.
Exam categoryWeightInvigilationDurationSupport materialsGroupingComment exam
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
FIN35211
Grading scale:
ECTS
Grading rules:
Internal and external examiner
Resit:
Examination every semester
100Yes3 Hour(s)
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
  • 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
  • Bilingual dictionary
  • Interest table
Duration:3 Hour(s)
Comment:
Exam code:FIN35211
Grading scale:ECTS
Resit:Examination every semester
Type of Assessment: 
Ordinary examination
Total weight: 
100
Workload activityDurationType of durationComment student effort
Teaching39Hour(s)
Review of assignments in plenary6Hour(s)
Prepare for teaching125Hour(s)
Submission(s)15Hour(s)
Examination18Hour(s)Exam incl. preparations
Expected student effort:
Workload activity:Teaching
Duration:39 Hour(s)
Comment:
Workload activity:Review of assignments in plenary
Duration:6 Hour(s)
Comment:
Workload activity:Prepare for teaching
Duration:125 Hour(s)
Comment:
Workload activity:Submission(s)
Duration:15 Hour(s)
Comment:
Workload activity:Examination
Duration:18 Hour(s)
Comment:Exam incl. preparations
Sum workload: 
203

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.