GRA 6283 Company Law and Finance
GRA 6283 Company Law and Finance
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.
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
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
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.
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
- Value and Capital Budgeting
- Discounted Cash Flow Valuation
- Net Present Value
- Making Investment Decisions
- Risk and Return
- Returns
- Measuring risk
- The Capital Asset Pricing Model
- Risk and Cost of Capital
- Capital Structure
- Introduction to Long Term Financing
- Capital Structure and Corporate Value
- Limits to the Use of Debt
- Corporate Valuation
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.
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.
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.
| Assessments |
|---|
Exam category: Submission Form of assessment: Written submission Weight: 50 Grouping: Group (2 - 3) Duration: 1 Week(s) Exam code: GRA 62831 Grading scale: ECTS Resit: Examination when next scheduled course |
Exam category: Submission Form of assessment: Written submission Invigilation Weight: 50 Grouping: Individual Support materials:
Duration: 3 Hour(s) Exam code: GRA 62832 Grading scale: ECTS Resit: Examination when next scheduled course |
All exams must be passed to get a grade in this course.
| Activity | Duration | Comment |
|---|---|---|
Prepare for teaching | 22 Hour(s) | Preparation for class discussion of case (twice). |
Student's own work with learning resources | 180 Hour(s) | |
Teaching | 72 Hour(s) | |
Submission(s) | 43 Hour(s) | Group home exam. |
Examination | 3 Hour(s) |
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.