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. The main focus is on financial investments (stocks and bonds), 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 .
Course description for study year 2025-2026. Please note that changes may occur.
Course code
BØK260
Version
2
Credits (ECTS)
10
Semester tution start
Autumn
Number of semesters
1
Exam semester
Autumn
Language of instruction
English
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
Discount rate / cost of capital
The various decision criteria for an investment. NPV, IRR, etc
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
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)
Required prerequisite knowledge
Statistics
Recommended prerequisites
Statistics
Exam
| Form of assessment | Weight | Duration | Marks | Aid |
|---|---|---|---|---|
| Written exam | 1/1 | 3 Hours | Letter grades | Standard calculator 1) |
1) Financial or graphing calculators NOT allowed
Coursework requirements
Weekly individual assignments: assignments must be approved in order to take the final exam.
Course teacher(s)
Course coordinator:
Olga Aleksandrovna RabanalStudy Program Director:
Tarjei Mandt LarsenMethod of work
One three hour lecture, and additional TA sessions. 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 courses
| Course | Reduction (SP) |
|---|---|
| Finance 1 (BØK260_1) | 10 |
| Capital investment and decision theory (ØK0111_1) | 2 |
| Managerial Finance (NH0523_1) | 6 |
| Managerial Finance (NH0523_A) | 6 |
| Financial management (ØK0012_1) | 6 |
| Finance 1 (ØK0012_2) | 6 |
| Finance 1 (ØK0012_A) | 6 |
| Finance 1 (BØK130_1) | 10 |
| Economic analysis (BHO200_1) | 5 |
| Corporate Finance (BHO395_1) | 10 |
| Corporate Finance in the hospitality industry (BHO395_2) | 10 |