Course

Corporate Finance (BØK260)

Facts

Course code BØK260

Credits (ECTS) 10

Semester tuition start Autumn

Language of instruction English

Number of semesters 1

Exam semester Autumn

Time table View course schedule

Literature The syllabus can be found in Leganto

Introduction

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 isEnglish .

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

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

Exam

Written exam

Weight 1/1

Duration 3 Hours

Marks Letter grades

Aid Standard calculator 1)

Exam system WISEflow

1) Financial or graphing calculators NOT allowed

Coursework requirements

Mandatory assignments
Weekly individual assignments: assignments must be approved in order to take the final exam.

Method 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)
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

Open for

Hotel Management - Bachelor Business Administration - Bachelor
Exchange programmes at UIS Business School

Course assessment

The faculty decides whether early dialogue will be held in all courses or in selected groups of courses. The aim is to collect student feedback for improvements during the semester. In addition, a digital course evaluation must be conducted at least every three years to gather students’ experiences.

Contact

Study Program Director:
Tarjei Mandt Larsen
Course coordinator:
Olga Aleksandrovna Rabanal

Offered by

UiS Business School

UiS School of Business and Law

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