Fundamentals of Corporate Finance

Introduction

A corporation is a separate legal entity and can be viewed as a vehicle for making-, organizing-, and funding investment decisions. In a limited liability corporation, shareholders have delegated investment decisions to the board of directors and an administration (the Chief Executive Officer, Chief Financial Officer, etc.).  The course will establish a framework for how an administration ought to make investment decisions on behalf of shareholders.

Course content

1. Value and Capital Budgeting
    a. Discounted Cash Flow Valuation
    b. Net Present Value
    c. Making Investment Decisions

2. Risk and Return
   a. Returns
   b. Measuring risk
   c. The Capital Asset Pricing Model
   d. Risk and Cost of Capital

3. Capital Structure
   a. Introduction to Long-Term Financing
   b. Equity financing
   c. Debt financing
   d. Capital Structure and Corporate Value
   e. Limits to the Use of Debt

4. Corporate Valuation
   a. Valuation case

5. Leasing
   a. Types of Lease Financing
   b. Lease vs. Buy Decision

6. Options
   a. Call and Put Options
   b. Valuing Options

7. International Corporate Finance
   a. The Foreign Exchange Market: Triangular Arbitrage
   b. The Foreign Exchange Market: Parity Relations
   c. International Capital Budgeting
   d. Exchange Rate Risk

Disclaimer

This is an excerpt from the complete course description for the course. If you are an active student at BI, you can find the complete course descriptions with information on eg. learning goals, learning process, curriculum and exam at portal.bi.no. We reserve the right to make changes to this description.