GRA 6285 Capital-Markets Financing

GRA 6285 Capital-Markets Financing

Course code: 
GRA 6285
Department: 
Finance
Credits: 
12
Course coordinator: 
Espen Henriksen
Morten Kinander
Product category: 
Master
Portfolio: 
MSc in Law and Business
Semester: 
2020 Spring
Active status: 
Active
Teaching language: 
Norwegian
Course type: 
One semester
Introduction

All companies need funds to start and maintain profitable business. They must in other words be able to raise capital. In addition to acquiring capital from ongoing operations and banks, the capital markets are a highly important venue for funding. This course gives an introduction to the foundational legal rules and the core principles of corporate finance when businesses enter the capital markets in order to raise capital through Initial Public Offerings, private placements and bond issues.

The students will learn to understand the central and important capital market rules and duties that apply to investors and issuers, as well as the financial principles underlying these rules. More concretely, by completing the course, the students shall be able to identify, consider and evaluate the core challenges and questions when entering the capital markets. It is also expected that the students shall be able to take a position on complex questions of choice of form of financing, where financial factors or cost, risk, time, company size etc. are evaluated against the legal rules to be applied in different situations. An important part of the course will also consist in the handling of inside information and other foundational rules of market behaviour, such as informational duties and market manipulation. As all capital markets law is international in its orientation, the students will be proficient in EU/EEA law, and be able to communicate with representatives of issuers and investors throughout Europe on an equal footing.

Learning outcomes - Knowledge

The candidate:

  • has advanced knowledge within the general field of corporate finance and specialized insight in the intersection of law and finance when firms are seeking external financing
  • understands the value added for society of firms’ external financing.
Learning outcomes - Skills

The candidate:

  • can analyse and deal critically with various sources of information and use them to structure and formulate legal arguments with a sound basis in both law and finance
  • understands existing theories, methods and interpretations in the intersection of corporate law and corporate finance and can work independently to solve practical problems
  • can use relevant methods for legal sources and financial in an independent manner
General Competence

The candidate:

  • can analyse relevant academic, professional and research ethical problems
  • can apply her/his knowledge and skills in new areas in the intersection of corporate law and corporate finance in order to carry out advanced assignments and projects
  • can communicate extensive independent work and masters language and terminology of both corporate law and corporate finance

     

Course content
  1. Overview of different financing options and forms: When, why and how?
  • The main difference between equity and debt financing: Shareholder vs creditor position
  • Long-term financing
  • IPO
  • Private placements, rights placements
  • Bank and bond debt
  • Case: IPO or private placement

2. Equity financing

  • Valuing stocks
  • Raising equity capital
  • Capital markets and the price of risk
  • Private placements vs rights issues
  • Non-discrimination and dilution protection
  • Prospectus rules
  • Process/duration
  • Environmental, social and governance (ESG) factors

3.  Debt financing. Choice of transactional form. Bank vs bond market financing

  • Valuing bonds
  • Types of bond loans; standard, convertible, bundled, warrants, loan on special terms
  • Green bonds
  • Loan agreements, terms and conditions, covenants
  • The institutions (bondholder meetings, the role of the trustee, etc) 

4.  IPO and SPO

  • Background: Main considerations and reasons
  • Conditions: distribution, market cap etc
  • Due diligence
  • Prospectus
  • Process/duration
  • IPO Puzzles

5. Leasing

  • The basics of leasing
  • Reasons for leasing
  • Accounting, tax and legal consequences of leasing

6.  Options

  • Option basics
  • The binomial option-pricing model
  • The Black-Scholes option-pricing model
  • Corporate applications of option pricing
  • Real options

7. Market Abuse

  • Price formation and the significance of secondary markets
  • The concept of inside information
  • Insider dealing
  • Informational duties, periodical and continuing
  • Market soundings
  • Buy-backs and stabilisation/green shoe options
  • Market manipulation

 

Teaching and learning activities

The course will be taught through lectures, discussions, and project assignments. It will also be taught through blended learning, through Facebook discussions of current events in the news etc.

 

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 62851
Grading scale:
ECTS
Grading rules:
Internal and external examiner
Resit:
Examination when next scheduled course
50Yes3 Hour(s)
  • Bilingual dictionary
Individual
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
GRA 62852
Grading scale:
ECTS
Grading rules:
Internal and external examiner
Resit:
Examination when next scheduled course
50No1 Week(s)Group/Individual ( 1 - 3)
Exams:
Exam category:Submission
Form of assessment:Written submission
Weight:50
Invigilation:Yes
Grouping (size):Individual
Support materials:
  • Bilingual dictionary
Duration:3 Hour(s)
Comment:
Exam code: GRA 62851
Grading scale:ECTS
Resit:Examination when next scheduled course
Exam category:Submission
Form of assessment:Written submission
Weight:50
Invigilation:No
Grouping (size):Group/Individual (1-3)
Support materials:
Duration:1 Week(s)
Comment:
Exam code: GRA 62852
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 teaching12Hour(s)Preparation for class discussion of case.

Self study170Hour(s)
Teaching72Hour(s)
Group work / Assignments60Hour(s)For group assignment.
Examination6Hour(s)
Expected student effort:
Workload activity:Prepare for teaching
Duration:12 Hour(s)
Comment:Preparation for class discussion of case.

Workload activity:Self study
Duration:170 Hour(s)
Comment:
Workload activity:Teaching
Duration:72 Hour(s)
Comment:
Workload activity:Group work / Assignments
Duration:60 Hour(s)
Comment:For group assignment.
Workload activity:Examination
Duration:6 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.