Course

Corporate Finance (BØK260)

This introductory course in finance primarily focuses on how companies select investments, and then determine financing for the investment decisions. The purpose of the course is to give the students the necessary knowledge about the concepts and methods used to make investment decisions. Although the main focus is on financial investments (shares and bonds), the methods reviewed are also applicable to so-called real investments (developments, etc.). In addition, project financing and various investment decisions for projects are reviewed. An introduction to options is also given. The language of instruction and the exam language is English. 


Dette er emnebeskrivelsen for studieåret 2022-2023. Merk at det kan komme endringer.

See course description and exam/assesment information for this semester (2024-2025)

Semesters

Fakta

Emnekode

BØK260

Vekting (stp)

10

Semester undervisningsstart

Autumn

Undervisningsspråk

English

Antall semestre

1

Vurderingssemester

Autumn

Timeplan

Vis timeplan

Litteratur

Pensumlisten finner du i Leganto

Content

  • Introduction - course context in economy and financial markets
  • Cash flows
  • Interest calculation / financial mathematics
  • Decision criteria (Net present value, internal rate of return, payback, etc.)
  • Risk and return
  • Cost of capital
  • Market efficiency
  • Financing of investments
  • International finance
  • Options
  • Risk management

Learning outcome

Knowledge

On completion of the course, students will be able to understand:

  • General principles of investment analysis 
  • Why we focus on cash flows and not profit
  • What the size of a cash flow means and the various discounting principles 
  • Discount rate / cost of capital
  • The significance of, and the differences between, the various decision criteria for an investment
  • The interest rate's forward structure and forward rates.
  • The concept of total risk, and how it is determined
  • Portfolio theory and its significance for diversification.
  • Beta and the Capital Asset Pricing Model (CAPM) 
  • Weighted Average Cost of Capital (WACC) and when to use it
  • Market efficiency
  • Financing decisions
  • Options and risk management in international finance

Skills

Upon completion of this course, students will be able to:

  • make investment calculations and decisions for projects
  • apply discounting rules 
  • use various decision criteria for both equities and bonds
  • apply the portfolio theory to different investment options and calculate Beta
  • apply the CAPM model
  • calculate the weighted average cost of capital
  • calculate the present value of investment projects and discuss risk in investment decisions
  • evaluate different financing options
  • evaluate options and arbitrage opportunities (as opposed to estimating option premiums)

 

Forkunnskapskrav

Et av følgende alternativer:
Financial accounting - principles and analysis (BØK102)
Financial and management accounting - an introduction (BØK195)

Anbefalte forkunnskaper

Financial accounting - principles and analysis (BØK102), Mathematical method for economists (BØK108), Financial and management accounting - an introduction (BØK195), Microeconomics (BØK265)

Exam

Form of assessment Weight Duration Marks Aid Exam system Withdrawal deadline Exam date
Written exam 1/1 3 Hours Letter grades None permitted, Standard calculator 1), Valid calculator Inspera assessment 10.11.2022 24.11.2022

1) Financial or graphing calculators NOT allowed

Vilkår for å gå opp til eksamen/vurdering

Mandatory assignments
 Individual assignments: all assignments must be approved in order to take the final exam. 

Fagperson(er)

Study Program Director:

Tarjei Mandt Larsen

Course coordinator:

Olga Aleksandrovna Rabanal

Method of work

Two sessions comprising four hours (48 hours) are lectures. In order to stimulate a good learning environment, two-way communication with the students is necessary. The students are responsible for participating in lectures, with questions, comments and discussion. It is therefore crucial that students prepare well for each lecture. The expected workload in this course is approximately 300 hours, including self-study.

Overlapping

Emne Reduksjon (SP)
Corporate Finance (BØK260_2) , Capital investment and decision theory (ØK0111_1) 2
Corporate Finance (BØK260_2) , Managerial Finance (NH0523_1) 6
Corporate Finance (BØK260_2) , Managerial Finance (NH0523_A) 6
Corporate Finance (BØK260_2) , Financial management (ØK0012_1) 6
Corporate Finance (BØK260_2) , Finance 1 (ØK0012_2) 6
Corporate Finance (BØK260_2) , Finance 1 (ØK0012_A) 6
Finance 1 (BØK130_1) , Corporate Finance (BØK260_2) 10
Economic analysis (BHO200_1) , Corporate Finance (BØK260_2) 5
Corporate Finance (BHO395_1) , Corporate Finance (BØK260_2) 10
Corporate Finance in the hospitality industry (BHO395_2) , Corporate Finance (BØK260_2) 10

Åpent for

Business Administration - Bachelor's Degree Programme
Exchange programmes at UIS Business School

Emneevaluering

Students will have the opportunity to give feedback on the course first in an early dialogue, and then in a written course evaluation at the end of the course.

Litteratur

Book Fundamentals for corporate finance Brealey, Richard A.,, New York, NY :, McGraw Hill LLC, pages cm., [2023], isbn:9781264101566, The link goes to McGraw Hill's webpage where you can buy the book and the "Connect" that you need for class assignments. You need the Connect Bundle since the students will be required to complete the online problems. Therefore, the students should have the following options: (1) buy connect which gives them an online book, (2) get the textbook which should include a connect code so the students can complete the assignments. The Connect Bundel has ISBN 9781266491689 - use the "Digital" Tab on the McGraw Hill's webpage. https://www.mheducation.com/highered/product/fundamentals-corporate-finance-brealey-myers/M9781264101566.htmlView online

Kontakt

Study Program Director:

Tarjei Mandt Larsen

Course coordinator:

Olga Aleksandrovna Rabanal

Tilbys av

UiS Business School

UiS School of Business and Law

The course description is retrieved from FS (Felles studentsystem). Version 2