AØKA08012U  Corporate Finance and Incentives (F)

Volume 2016/2017
Education

MSc programme in Economics - elective course

BSc programme in Economics - prioritized elective at the 3.year

The course is part of the Financial line at the MSc programme in Economics,   symbolized by ‘F’.

Tilvalgsuddannelsen i Erhvervsøkonomi - valgfag på KA delen

MSc programme in mathematics-economics

Content

This is the Economics programme’s central course on Finance, giving a broad insight into the core matter of the field. Building on earlier relevant courses from the Bachelor’s programme in Economics, it provides the common ground for later elective Finance courses.

The course develops your understanding of the different asset classes in financial markets, including bonds, stocks, forwards, futures and options. Based on considerations of investor demand, standard asset pricing methods are introduced. The pricing methodology is used to analyse the choice of investment projects inside firms, including the management of real options. Turning to classic corporate finance issues, the course explores the optimal capital structure of the firm, its optimal dividend policy, risk management, and the incentives of the firm’s management.

The asset pricing models include the Capital Asset Pricing Model (CAPM), the Arbitrage Pricing Theory (APT), risk-neutral pricing, and the Black-Scholes formula. Excel is used to solve problems in these areas. Market efficiency and investor behaviour is discussed.

Learning Outcome

After completing the course, the student should be able to:

Knowledge:

  • Understand, account for, define and identify the main methodologies, concepts and topics in Finance

  • Solve standard problems in Finance, partly using Excel

  • Criticize and discuss the main models in Finance, relating them to current issues in financial markets and corporate finance

Skills:

  • Manage the main topics and models in Finance

  • Organize material and analyze given problems, assessing standard models and results

  • Argue about financial topics, putting results into perspectivem drawing on the relevant knowledge of the field

Competencies:

  • Bring into play the achieved knowledge and skills on new formal problems, and on given descriptions of situations in financial markets or corporations

  • Be prepared for more advanced models and topics in Finance

 

Syllabus updated November 28, 2016 (with the note *):

The main textbook for the course:

Jonathan Berk and Peter DeMarzo: Corporate Finance, Third Edition, Global Edition, Pearson.           http:/​/​catalogue.pearsoned.co.uk/​catalog/​academic/​product?ISBN=9780273792024.

Some supplementary shorter texts and current media clippings are supplied through Absalon.

Peter Norman Sørensen (2016): “Some Equations for the CAPM,” 5 pages, September 19, 2016 (*)

 

The course furthers the study of financial problems that was first introduced in the first-year 'Business Economics' course (Erhvervsøkonomi) at the BSc in Economics. It uses some knowledge of probability and statistics from the course 'Probability theory and statistics' (Econometrics A) at the BSc in Economics. Pricing and decisions by investors and firms are analysed with the methods from our sequence of courses in Microeconomics. Some problems are analysed with the aid of Microsoft Excel.

Academic qualifications equivalent 1st and 2nd year of the Bachelor's programme in Economics
The lectures introduce the material from the syllabus. Students take a first reading of the material before the lecture, in order to engage in informed discussions during lectures.
This course also offers exercise classes meeting every week. Weekly exercise sets will become available through Absalon. Students consider how to solve the exercises before the class meets – working with the exercises provides the best chance to deeply understand the course material. Problem solving helps to realize which parts of the syllabus are harder to learn.
Most exercise sets contain a mandatory exercise. The solutions to a number of such exercises must be approved as a condition for the final exam.
Schedule:
The course consists of 2 hours of lectures 1 to 2 times every week and 2 hours of exercise classes every week for 14 weeks.

Please be aware regarding exercise classes:
- That the schedule of the exercise classes is only a pre-planned schedule and that it can be changed until just before the teaching begins without the participants accept. If this happens the participants will be informed or can see it at the above link. After enrollment it can be seen in KUnet and by the app myUCPH.
- That if too many students have wished a specific class, students will be registered randomly at another class. It is not possible to change class after the registration period has expired, unless the registration clashes with another course registration.
- That if not enough registered students or available teachers the exercise classes may be jointed.
- That it is not allowed to participate in an exercise class the student is not registered.
- That at least exercise classes number 1 and 2 will be taught in English.

Timetable and venue:
To see the time and location of classroom please press the link under "Se skema" (See schedule) at the right side of this page (16E means Autumn 2016).

You can find the similar information partly in English at
https:/​/​skema.ku.dk/​ku1617/​uk/​module.htm
-Select Department: “2200-Økonomisk Institut” (and wait for respond)
-Select Module:: “2200-E16; [Name of course]””
-Select Report Type: List
-Select Period: “Efterrår/Autumn – Weeks 30-3”
Press: “ View Timetable”
Credit
7,5 ECTS
Type of assessment
Written examination, 3 hours under invigilation
Individual written closed book exam at the computers of Copenhagen University.
The exam assignment is in English and can be answered in English or in Danish. Language must be chosen at the course registration.
Exam registration requirements

80% of weekly hand-ins must be approved in order for the student to be eligible to take the exam.

Aid
Without aids
Marking scale
7-point grading scale
Censorship form
External censorship
20 % censorship
Exam period

The exam takes place December 21, 2016 at Peter Bangs Vej 36. 2000 Frederiksberg http:/​/​pc-eksamen.ku.dk/​pc_exam The exact time of the exam will be informed in the Self-Service at KUnet

For enrolled students more information about examination, exam/re-sit, rules etc. is available at the student intranet for Examination (English),student intranet for Examination (KA-Danish) and student intranet for Examination (BA-Danish).

Re-exam

The written re-exam takes place February 15, 2017 at Peter Bangs Vej 36. 2000 Frederiksberg http:/​/​pc-eksamen.ku.dk/​pc_exam The exact time of the exam will be informed in the Self-Service at KUnet

If only a few students have registered for the re-exam, the exam might change to an oral exam including the date for the exam, which will be informed  by the Examination Office.

 

Criteria for exam assesment

Students are assessed on the extent to which they master the learning outcome for the course.

To receive the top grade, the student must be able to demonstrate in an excellent manner that he or she has acquired and can make use of the knowledge, skills and competencies listed in the learning outcomes.

  • Category
  • Hours
  • Lectures
  • 42
  • Class Instruction
  • 28
  • Exam
  • 3
  • Preparation
  • 133
  • Total
  • 206