Corporate Finance and Control (MRR240)

Content

The course is an intermediate level corporate finance class that emphasizes real-life decision-making. In order to make insightful financial decisions, it is important to comprehend and make use of financial theories. These theories constitute the starting point of the course, although a substantial part of the course relies on exercises, mini-cases and real-life data, in which students learn how to interpret and make real decisions anchored in theory.

Students will solve problems, suggest their own decisions, and also critically assess existing practices, policies or proposals. Solutions to these real-life problems are presented and discussed in written and verbal formats.

The course covers a range of financial decisions. At the start of the course, a frame of reference is developed. This includes outlining important financial theories, corporate governance mechanisms, the functioning of various financial markets and risk assessment. This is followed by more in-depth analyses of classic empirical corporate finance decisions such as capital structure and dividend policy. This leads to more specialized decisions including corporate restructuring (IPOs, spin-offs, corporate acquisitions, etc.).

The last part of the course emphasizes internal financial decisions and financial aspects. This includes, for example, the assessment and internal comparison of investment projects, the decision to centralize certain financial corporate functions, as well as how to use internal control mechanisms and the disclosure of financial targets and strategies.

The course is part of the Master of Accounting and Auditing programme. For this reason, a particular emphasis is given to the accounting aspects of typical financial problems. This includes, for example, how corporate disclosure relates to financial decision-making.

Please note that MRR240 requires group work and active participation in (in-class) seminars.

Learning outcome

Knowledge

On completion of the course, students will have:

• a very good understanding of the range of financial decisions encountered by modern corporations.
• a good understanding of how financial theories facilitate corporate decision-making in general; and how they affect specific corporate finance decisions.
• good knowledge of key corporate finance decisions, including decisions relating to: capital structure, risk and capital costs, dividend policy, corporate restructurings, investment appraisals and cash management.
• knowledge on how the relationships between managers and different type of owners interact with the different type of financial decisions.

Skills

On completion of the course, students will have a good understanding of which factors to rely on when for example:

• Determining risk and capital costs;
• Suggesting reasonable dividend pay-out ratios, capital structures and liquidity levels;
• Assessing the feasibility of divestiture, equity issue and acquisition decisions;
• Analyzing and choosing between investment projects;

General competence

On completion of the course, students will have extended their competence in:

• Analyzing real-life financial problems and identifying the aspects that are critical for decision-making;
• Discussing and analyzing business problems and, in so doing, integrating different perspectives to inform a balanced overall decision;
• Solving problems through group work, presenting case solutions to peers and setting up and using financial modelling tools.

Required prerequisite knowledge

None

Exam

Coursework requirements

To be eligible to sit the written examination, students must pass four of the seminars that are held throughout the course. In order to pass the seminar, students must participate in a student group that hands in a seminar paper that is approved, and must actively participate in the seminar (presentation and discussion).

Course assessment

There must be an early dialogue between the course coordinator, the student representative and the students. The purpose is feedback from the students for changes and adjustments in the course for the current semester.In addition, a digital course evaluation must be carried out at least every three years. Its purpose is to gather the students experiences with the course.

Literature