BE-210 Principles of Corporate Finance

The course is connected to the following study programs

• Bachelor's Programme in Business Administration
• Master's Programme in Business Administration (5 years)

Teaching language

Norwegian.

Recommended prerequisites

BE-110 Managerial Accounting, BE-111 Financial Accounting 1, BE-209 Financial Accounting 2 and ME-111 Business Analytics 1, or equivalent.

For single course students, these subjects (or equivalent) are required for admission.

Course contents

Key topics in this course are different approaches and methods for measuring project profitability, the relationship between cash flow and return. The importance of taxation and debt financing is highlighted. The choice between mutually exclusive investments is also discussed. The course covers different methods for project and company valuation. The course discusses investor's use of financial markets for investments, and companies' use of financial markets for financing. For the company, the choice between debt and equity (capital structure) is emphasized, especially the relationship between capital structure and project valuation. We also discuss the societal role of the company, and how different aspects of sustainability (ESG – Environment, Social, Governance) affect capital cost and project valuation.

Learning outcomes

Upon successful completion of this course the students should be able to:

• understand the relationship between the use of NPV as a decision criterion for investments

• demonstrate understanding of the concept of working capital management

• work out the relevant free cash flow for an investment, and implement profitability analyses based on net present value

• calculate the internal rate of return, and understand the relationship with net present value

• understand the concepts of systematic and diversifiable risk in financial markets

• demonstrate insight into the capital asset pricing model (CAPM) and apply it to estimate the cost of capital

• understand how capital structure affects the weighted average cost of capital (WACC) and investment value

• understand how sustainability and responsible investing affects mananagement, investments, financing opportunities and capital costs for a company

Examination requirements

Approved compulsory assignments. More information on Canvas by the start of the semester.

Teaching methods

Lectures and group work. Estimated work load is about 200 hours.

Evaluation

The person responsible for the course, in consultation with the student representative, decides the method of evaluation and whether the courses will have a midterm- or end of term evaluation, see also the Quality System, section 4.1. Information about evaluation method for the course will be posted on Canvas.

Admission for external candidates

No

Offered as Single Standing Module

Yes. Subject to availability or capacity.

Admission Requirement if given as Single Standing Module

BE-110 Managerial Accounting, BE-111 Financial Accounting 1, BE-209 Financial Accounting 2 and ME-111 Business Analytics 1, or equivalent.

Assessment methods and criteria

3 hour written examination with letter grades.

Reduction of Credits

This course’s contents overlap with the following courses. A reduction of credits will occur if one of these courses is taken in addition:

Course	Reduction of Credits
BE-2500 – Finance, Investment Analysis and Financial Strategy	7.5
BE-2500 – Finance, Investment Analysis and Financial Strategy	7.5
BE-2500 – Finance, Investment Analysis and Financial Strategy	7.5
BE-2500 – Finance, Investment Analysis and Financial Strategy	7.5
BE-201 – Finance Topics	7.5
BE-200 – Financing and Investment	7.5
BE-200 – Financing and Investment	7.5
BE-210 – Principles of Corporate Finance	7.5