All businesses finance their operations; and in so doing, they make corporate finance decisions. This includes decisions on how to source capital from financial markets, the choice between different capital providers and the optimal level of indebtedness and liquidity. To make these decisions, corporations also need knowledge on their own business risk, their potential investment projects and the functioning of financial markets. All of these issues are important aspects of this course.
Course description for study year 2021-2022. Please note that changes may occur.
UiS Business School, UiS Business School
Knowledge On completion of the course, students will have a very good understanding of the range of financial decisions that modern corporations confront. They have a good understanding of how financial theories facilitate corporate decision-making in general; and how they affect specific corporate finance decisions. Students will also have developed good knowledge of central corporate finance decisions, including decisions relating to: Capital structure, Risk and capital costs, Dividend policy, Corporate restructurings, Investment appraisals and Cash management. Finally, students obtain knowledge ofn 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 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 extend their competence in: Analyzing real-life financial problems and identify aspects critical for decision-making; Discussing and writing analyses of business problems; and in so doing, integrate different perspectives to inform a balanced overall decision; Solve problems through group work and present case solutions to peers; and set up and use financial modelling tools.
The course is an intermediate level corporate finance class that emphasizes real-life decision-making. 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, but 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.
Course participants solve problems and suggest their own decisions, and they 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. In the beginning of the course, a frame of reference is developed. This includes an outlining of important financial theories, corporate governance mechanisms, the functioning of various financial markets and risk assessment. From here follows more in-depth analyses of classic empirical corporate finance decisions such as capital structure and dividend policy. This leads on to more specialized decisions including corporate restructurings (IPOs, Spin-offs, corporate acquisitions, etc.).
The last part of the course emphasizes internal financial decisions with financial aspects. This includes, for example, the assessment and internal comparison of investment projects, the decision to centralize some financial functions of the corporation, as well as how to use internal control mechanisms and the disclosure of financial targets and strategies.
The course is taught within the Master of Accounting and Auditing. For this reason, a particular emphasis is given to accounting aspects of the financial problems. This includes, for example, the role of the auditor, financial reporting and the interactions between accounting disclosure requirements and financial decisions.
Required prerequisite knowledge
Eksamen / vurdering
To be eligible to sit for the written examination, a student must pass five (5) of the seminars held throughout the course. To pass the seminar, a student participates in a student group that hand’s in a seminar paper that is approved, and the student participates actively at the seminar (presentation and discussion).