Course description

Shipping Finance

Introduction

The task of this course is to help understand the economics of the shipping indusrty. What makes it so interesting is the greate voatility in the industry and it is a perfect market for blending theory and practice. Because shipping is such an old indusrty, with a history of continous change, we have a unique oppertunity to learn from the past.
The essence of business administration includes corporate finance (i.e. investment and financing). Good knowledge within these areas is a necessary prerequisite to understand the economic content of investment and financing decisions. This is vital knowlegde for people working in the shipping industry. Further it is important to be able to obtain decision-relevant information, discuss and assess alternatives, make correct decisions and convey relevant and useful information.
The aim of this course in corporate finance in the shipping industry is to provide the students with essential knowledge and skills, so that they can take part in discussions on problems in finance and carry out simple analyses within the field, make correct decisions and communicate the results of the analyses in a comprehensible manner.
The course focuses mainly on capital structure in general, and capital sturcture in the shipping industry in particular.

Course content

1. Cost, Revenue and Cash Flows in the Shipping Industry, ch. 6 (MS)
2. Project analysis, ch. 10 (BMA)
3. Investment, Strategy and Economic Rents, ch. 11 (BMA)
4. Risk, Return and Shipping Company Economics, ch. 8 (MS)
5. Efficient Markets and Behavioral Finance, ch. 13 (BMA)
6. An overview of Corporate Finance, ch. 14 (BMA)
7. How Corporations Issue Securities, ch. 15 (BMA)
8. Pay-out Policy, ch. 16 (BMA)
9. Does Deby Policy matter?, ch. 17&18 (BMA)
10. Financing Ships and Shipping Companies, ch. 7 (MS)
11. Financing and Valuation, ch. 19 (BMA)

Learning outcome knowledge

After completed course, the students shall have learned:

  • Different financial theories
  • Capital structure decisions in different tax regimes.
  • Capital structure decisions and volatility, which is essential for the shipping industry.
  • How dividend decisions might affect firm value and firm.

 

Exam organisation

  • Home exam: 100%
  • Written exam: 0 (pass/fail)