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 in capital markets and about 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

  • are able to employ theories and models on essential problems in finance;
  • are able to 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);
  • are able to demonstrate how to manage risk using derivatives and other financial instruments.

  Competence:

  Upon successful completion, the students

  • are able to 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

• Compulsory Activity

  Two excel-based assignments. Submitted in groups of 1-4 students.

  Course approval for BED3 is not valid for BED3E, and vice versa.

• Assessment

  4-hour individual school exam.

  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

  Brealey, Myers, and Marcus, Fundamentals of Corporate Finance, McGraw-Hill/Irwin.

• Permitted Support Material

  Calculator

  Excel. You can only open and use the Excel document you will download from Wiseflow when the exam starts. You are not permitted to open or use other documents or programs on your PC.

  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/