BED3E Finance

• Topics

  The course is an introduction to finance. We will discuss investment and financing decisions made by corporate managers within the firm and their interactions with investors. The discussion will include the time value of money, NPV and other investment decision criteria, capital budgeting, and the valuation of stocks and bonds. Furthermore, we study the functioning of financial markets, including corporate financing, investors' capital placement and firms' risk management decisions. We introduce debt and dividend policy and discuss ethical issues and sustainability in investments.

• Learning outcome

  Knowledge

  Upon successful completion, the students

  • have knowledge of the firm's capital budgeting and financing decisions;
  • understand what sustainable investments mean, including how to measure sustainability and related profitability;
  • have knowledge about ethical standards in companies and related to trading;
  • understand how capital markets function and how they may be favourably utilized;
  • have knowledge about the development of capital markets and securities in these markets;
  • understand the pricing of securities and their risk characteristics;
  • understand the effects of debt financing versus equity financing.

  Skills

  Upon successful completion, the students

  • can employ theories and models on essential problems in finance;
  • can perform calculations related to profitability, return and risk for projects, securities, and sources of capital, as well as sustainable investments;
  • are able to judge ethical standards and related decisions
  • are able to make decisions on how to finance a firm's assets (debt versus equity) and how to spend annual profits (dividend policy);
  • can demonstrate how to manage risk using derivatives and other financial instruments.

  General competence

  Upon successful completion, the students

  • can communicate the elements mentioned above related to knowledge and skills;
  • are able to use this insight on practical problems;
  • are able to exchange views and experiences with other people with a background in the field of business, thereby contributing to good practice.

• Teaching

  A combination of 1) lectures where we encourage the students to discuss, 2) problem-focused learning in groups, and 3) some excel-based assignments.

• Recommended prerequisites

  We recommend that students have completed courses corresponding to BED1, MET1 and MET2, i.e., introductory courses in accounting and mathematics/statistics for economists.

• Credit reduction due to overlap

  BED3E overlaps 100% with BED3, and can not be taken in combination with BED3.

  BED3 and BED3E are the same course, but with different codes and different languages of instruction. According to https://lovdata.no/dokument/SF/forskrift/2021-04-29-1956https://lovdata.no/dokument/SF/forskrift/2021-04-29-1956 § 4-8 Number of attempts (4), you have a total of two assessment attempts for this course, and not two attempts for each of the course codes.

• Compulsory Activity

  Two Excel-based assignments. Submitted in groups of 2-4 students.

• Assessment

  4-hour digital school exam with access to Excel.

  The exam can be answered in English or Norwegian. Course approval from BED3E only is required to take the exam in BED3E. Course approval from BED3 does not cover the course approval requirement.

• Grading Scale

  A-F.

• Literature

  Berk, DeMarzo, and Harford, Fundamentals of Corporate Finance, Global Edition, Pearson.

• Permitted Support Material

  Calculator

  One bilingual dictionary (Category I)

  All in accordance with Supplementary provisions to the Regulations for Full-time Study Programmes at the Norwegian School of Economics Ch.4 Permitted support material https://www.nhh.no/en/for-students/regulations/https://www.nhh.no/en/for-students/regulations/and https://www.nhh.no/en/for-students/examinations/examination-support-materials/https://www.nhh.no/en/for-students/examinations/examination-support-materials/

• Retake

  BED3E is taught in the autumn semester and examination retakes will take place in the non-teaching semester, i.e., the following spring semester.

  The transition to the new retake policy is as follows:

  Teaching semester autumn 2024:

  Retake in the non-teaching semester will take place at the end of the spring semester in 2025 for all students with a valid course approval.

  Teaching semester autumn 2025:

  Retake in the non-teaching semester will take place at the end of the spring semester in 2026 for all students with a valid course approval.

  Teaching semester autumn 2026:

  Retake in the non-teaching semester will take place at the beginning of the following spring semester (first time January 2027) for all students who were registered for the assessment at the time of the exam in a teaching semester, and who did not receive a passing grade in the course (no show, sick note, withdrawal during the exam/interruption, and fail).

  From the autumn semester 2027 and onwards, the retakes to improve a passing grade can only take place in the teaching semester.