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Syllabus:

Corporate Finance and Analysis D, 15 Credits

Swedish name: Corporate Finance and Analysis D

This syllabus is valid: 2013-08-26 valid to 2014-08-24 (newer version of the syllabus exists)

Course code: 2FE180

Credit points: 15

Education level: Second cycle

Main Field of Study and progress level: Business Administration: Second cycle, has only first-cycle course/s as entry requirements

Grading scale: VG Pass with distinction, G Pass, U Fail

Responsible department: Business Administration

Contents

This finance course is intended for students who want to increase their familiarity with the practical applications of corporate finance and investments. The course is given and examined in English.

Module 1. Advanced financial statement analysis and valuation, 7,5 ECTS
Module 2. Advanced Corporate finance, 7.5 ECTS

Module 1. Advanced financial statement analysis and valuation, 7.5 ECCTS
The module aims to provide students with relevant theories, methods and models for valuing companies and their securities, primarily equity (common stock). The module deals with the analysis of financial statement information and the use of this information for business strategy analysis, performance evaluation and investment decisions. Accounting and discounted cash flow approaches to valuation are discussed as are forecasting of dividends, earnings, cash flows and pro forma analyses. During the module, students will also be introduced to the code of academic conduct, e.g. referencing, or how to avoid plagiarism and cheating.


Expected learning outcomes:
After successful completion of the module, the student should be able to:
  • value the equity, operations and debt of companies using different valuation approaches/models and financial statement information
  • analyze and reformulate financial statements to uncover a firm’s business strategy and value drivers so as to facilitate forecasting and valuation
  • analyze market prices, value drivers and financial measures, e.g., profitability, growth, P/B and P/E ratios, and their relations to estimated fundamental value
  • explain the relations between accounting standards, e.g. IFRS and US GAAP, accounting methods and value
  • practice working in teams in which the members may differ as regards field of specialization, gender, nationality and cultural background
  • conduct, write, present and critically review an equity research project
  • describe, recognize and apply the code of academic conduct to the student’s own work.

Focus of instruction:
The core topics of this module are covered by lectures, seminars, literature i.e. text book and research articles, cases and projects. Students are expected to take an active part in every aspect of the module.

Examination modes
Examination is based on a written comprehensive exam, on successful completion of a project and an individual exam on the code of academic conduct.

Module 2.   Advanced Corporate Finance, 7.5 ECTS
The primary purpose of this module is to provide an integrated overview of the most important concepts in Corporate Finance. The subject extends the student’s knowledge about the context in which corporations operate. Topics to be covered in this module include capital market imperfections and methods developed in finance to control risk and reduce uncertainty in the financial management of corporations. Issues in corporate policy and strategy, based on theoretical developments in finance are presented. Students will learn the processes involved in the valuation of debt and equity and the methods that have been used to manipulate external perceptions of business outcomes.

Expected learning outcomes
After completing this module, the student should be able to:
  • assess the impact of information asymmetry on corporate financial policy decisions from the selection of particular modes of financing to dealing with the problems associated with financial distress
  • explain the theoretical basis and applicable strategies applied in regard to issues of corporate control
  • compare and contrast leverage strategies in ideal versus real capital markets and be able to explain the expected impact of alternative taxation systems on the use of debt in a firm’s capital structure
  • argue for optimal levels of corporate debt and/or equity and be able to price an offering of either under different financing strategies
  • formulate and logically defend a position in regard to current issues, such as corporate control and governance, which confront corporations today

Focus of instruction
The core topics of this module will be covered through lectures, as well as in smaller group workshops and seminars.

Examination modes
Examination is based upon a written comprehensive individual exam and group assignments. A passing grade is required for each part of the module.

Expected learning outcomes

See respective module.

Required Knowledge

University: Courses in Business Administration (75 ECTS) At Basic level (A-level) and Intermediate level (B-level) a minimum of 60 ECTS in Management, Marketing, Accounting and Finance courses. At the C-level (Bachelor), a minimum 15 ECTS. Statistics or similar 7.5 ECTS.

Language: Proficiency in English equivalent to Swedish upper secondary course English B (IELTS (Academic) with a minimum overall score of 6.5 and no individual score below 5.5. TOEFL PBT (Paper-based Test) with a minimum score of 575 and a minimum TWE score of 4.5). TOEFL iBT (Internet-based Test) with a minimum score of 90 and a minimum score of 20 on the Writing Section)

Form of instruction

See respective module.

Examination modes

See also above under respectively module. The following grading system will be used:  Pass with distinction (Väl godkänd, Vg, 75% or more), Pass (Godkänd, G, 50% or more) Fail (Underkänd, U, less than 50%). To receive the grade Pass with distinction (Väl godkänd) on the course, the student must have achieved that grade in three of the four modules.

Students who fail to present a photo ID at the occasion of a written examination cannot have their results registered.
In case of failure on seminar participation or individual and group assignments, compensating assignments must be completed in accordance with instructions given, no later than two weeks after the completion of the module.
Students who do not pass at the time of the normal written examination will be offered an opportunity to sit a further examination within a month. Beyond that, additional examination opportunities normally arise every academic year, one week prior to the start of the autumn term.
When a student has failed an examination on two occasions, he or she has a right to have another grading teacher. A written request for an alternative examiner should be handed to the director of studies no later than two weeks before the next examination opportunity.

Rules and regulations concerning the production of academic texts and correct referencing will be applicable to all written assignments. (see instructions in the Thesis manual. Thesis writing in Business Administration.) Urkund records may be used for control.

Lectures are normally not obligatory. However attendance is expected because the lectures are designed to facilitate students towards achieving course specific learning objectives. In addition lectures often provide insightful explanations of, and can supplement and provide contrast to, the course literatere and other relevant course materials. 

A student who has passed an examination cannot retake the examination to get a higher grading.
Grades on the course are awarded when students have passed all examinations and compulsory course elements.

Academic credit transfer
Academic credit transfers are according to the University credit transfer regulations.

Other regulations

This is a course at the D-level in an MSc-degree at Umeå University. The course can also be included in study programs in Business Administration and Economics at Umeå School of Business and Economics.

Literature

Valid from: 2013 week 35

Penman Stephen H.
Financial statement analysis and security valuation
5th ed. : New York : McGraw-Hill Higher Education : 2012 : 740 s. :
ISBN: 978-0-07-132640-7 (pbk.)
Mandatory
Search Album, the University Library catalogue

Principles of corporate finance
Brealey Richard A., Myers Stewart C., Allen Franklin
10. ed., global ed. : New York, NY : McGraw-Hill/Irwin : 2011 : 944 S. :
ISBN: 978-0-07-131417-6
Mandatory
Search Album, the University Library catalogue

Umeå School of Business and Economics (latest edition)
Thesis writing in Business Administration. Thesis manual.
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