Company Law and Finance

Introduction

Teaching language is mainly Norwegian. However, there may be lectures and exams given in English.

This course integrates corporate law and corporate finance. A corporation is a separate legal entity and can be viewed as a vehicle for making-, organizing-, and funding investment decisions. The course gives an advanced treatment on Norwegian corporate law, which is completely harmonized with EU-law, with an emphasis on the regulation of the companies’ capital. 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.

Norwegian Company Law is completely harmonized with EU Company law.

Course content

In this course description we are using the terms “The Limited Liability Companies Act” and “The Public Limited Liability Companies Act” to refer to “Lov om aksjeselskaper (aksjeloven, asl.)” and “Lov om allmennaksjeselskaper (allmennaksjeloven, asal.)”, respectively. Collectively we are referring to aksjeloven and allmennaksjeloven as “The Limited Liability Companies Acts”.

Corporate Law

1. The principle of duty to make profit in the Limited Liability Companies Acts, emphasizing the tradeoff between Corporate Social Responsibility (CSR) and the principle of duty to make profit.

2. Equity
Share capital/equity
The Limited Liability Companies Acts § 3-4 og § 3-5
The Limited Liability Companies Acts § 3-6
Overview of the regulations that aims to protect the companies’ capital

3. Holding companies and intra group transactions
The definition of a holding company in the Limited Liability Corporation Acts, ref. The Limited Liability Companies Acts § 1-3
Intra-group transactions, ref. The Limited Liability Companies Acts § 3-9
The Limited Liability Companies Acts § 8-7, § 8-8, § 8-9 og § 8-11
ref. The Limited Liability Companies Acts § 6-28 og § 5-21 and the articles of association

4. Minority squeeze outs and valuation of minority interests

5. Cash dividends

6. Shareholder Loan Agreements

7. Stock repurchases

8. Writing down the book value of common equity

9. Mergers and demergers

11. Company dissolution

12. Important considerations when choosing organizational form

Corporate Finance

1. Value and Capital Budgeting
   1. Discounted Cash Flow Valuation
   2. Net Present Value
   3. Making Investment Decisions
2. Risk and Return
   1. Returns
   2. Measuring risk
   3. The Capital Asset Pricing Model
   4. Risk and Cost of Capital
3. Capital Structure
   1. Introduction to Long Term Financing
   2. Capital Structure and Corporate Value
   3. Limits to the Use of Debt
4. Corporate Valuation
5. Options