Teaching starts Spring

Language of instruction English

Recommended previous knowledge This course builds on BE-405 Investments.

Learning outcomes Upon completion of this course students should be able to understand how: the no-arbitrage principle governs prices in financial markets information from financial markets may be used to value real assets taxes influence firms´ financing and payout choices firms sometimes can benefit from risk management programmes to use derivatives to manage a firm´s risk exposures conflicts between shareholders and debt holders arise and how they can be minimized managerial incentives affect financial decisions financial decisions affect stock prices taxes, operation synergies, and management incentive conflicts provide motives for mergers and acquisitions

Course contents This course presents the cutting edge of what today´s top scholars and practioners know about corporate finance. The underlying philosophy of the course is that finance is not a set of topics or a set of formulas. Rather, it is the consistent application of a few sensible rules and themes. One common theme is that capital assets must be valued in a way that rules out the possibility of riskless arbitrage. This powerful assumption can be used to price financial securities and to value real investment projects. To identify whether the pricing of a real investment allows one to create wealth, it is generally necessary to construct a portfolio of financial assets that tracks the investment. The course demonstrates how real investments may be analyzed using tracking portfolios. Another common theme is that financial decisions are interconnected and, therefore, must be incorporated into the overall corporate strategy of the firm. For example, a firm´s ability to generate positive net present value projects today depends on its past investment choices as well as its financing choices. Presenting common themes and rules whenever possible, the course attempts to present a variety of corporate finance topics in an integrated manner: Valuation of financial and real assets, capital financial structure, incentives, information and corporate control, and corporate risk management.

Teaching methods The course consists of twelve three-hour lectures, accompanied by a sizeable amount of individual/group work with problems in MyFinanceLab or a similar type of computer based "finance lab.

Examination requirement Approved compulsory assignment

Assessment methods and criteria 4-hour written examination with graded marks

Type of course Theoretical

Level of course Graduate

Year of study Normally fourth year

Name of lecturer/contact person Head of Department Andre Tofteland or Academic International Coordinator Oddmund Wallevik

Mode of delivery Face-to-face