Financial Strategy

Introduction

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, obtain decision-relevant information, discuss and assess alternatives, make correct decisions and convey relevant and useful information.
The aim of this course within the field of corporate finance is to provide the students with essential basic 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 Financial Strategy is mainly focused on financing issues and management of financial risks. By studying the main activities carried out in a company as financing projects over multiple periods, emphasis is placed on evaluating all economic and sustainable effects of the project and of taking a long-term perspective. The course therefore starts with capital structure and dividend decisions, followed by an introduction to option pricing.

Course content

1. Short summary of BØK 3423 Finans
2. Risk. BMN kap. 1-2
3. Risk and cost of capital. BMN kap. 3
4. Financing - Long term financing. BMN kap. 4-5
5. Capital structure and risk. BMN kap. 6
6. Capital structure and value - Modigliani & Miller (no taxes). BMN kap. 7
7. Capital structure and value - Modigliani & Miller (taxes). BMN kap. 8
8. Adjusted present value. BMN kap. 9
9. Valuation. BMN kap. 10
10. Dividend. BMN kap. 11
11. Options. BMN kap. 12