Norwegian School of Management (BI)
GRA 2302 Corporate Finance
Instructor:
Yong-Cheol Kim, Visiting Associate Professor
Department of Financial Economics
Office:
24-42, Phone 67 55 71 12, e-mail: yong-cheol.kim@bi.no
Office Hours: Wednesday 13:00-15:00
Lecture:
Auditorium 310, 12:30-15:15 Mondays
Term:
Winter 2000
Course Objectives
Finance is concerned with decision making process under uncertainty. The choice between
alternative set of financial decision has significant and long-term implications on firm value.
During this course, we will develop techniques and issues for the optimal financing
decisions and risk management with the goal of maximizing the value of firm. Although our focus
is real-world applications, the lectures will give the participants a feeling for the theoretical
justifications of the practice employed by corporate management.
Compulsory Literature
Text: Ross, S.A., R.W. Westerfield, J.F. Jaffe, Corporate Finance, 5th Edition (Irwin, 1999).
Recommended:
Brealey, B. and S. Myers, 2000, Principles of Corporate Finance, Sixth Edition, McGraw-Hill
Korsvold, P. and D.Michalsen, Eksamensoppgaver med Løningsforslag i Finans, BI.
Class
There will be nine sessions and each session will last two hours and 45 minutes, including two 15
minutes breaks. The major activity will be my teaching and your response. To have an effective
learning in a large class environment, punctuality and keeping noise down are essential, and I
expect full cooperation from everybody. There also will be three problem sessions. Exact time and
location will be announced later during the course.
There will be a break after the first five lectures, i.e., there will be no lecture on Monday, 7 th of
February
Evaluation
Evaluation of each participant will be based entirely on the final exam.
Corporate Finance (GRA2302)
1
Session
1
Jan. 3
Chapter and topic (Tentative)
Review of First Course of Corporate Finance
Efficient Capital Market
13
1,2
Jan. 3, 10
3
Jan. 17
4
Jan. 24
Corporate Financing Decisions and Efficient Capital Market
Capital Structure: Tax effects (Corporate and Personal Taxes)
15
Capital Structure: Basic concepts and Corporate Taxes
16.7
17
Personal Taxes
Valuation and Capital Budgeting for the Levered Firm
Capital Structure: Effect of Financial distress
16
Capital Structure: Limits to the Use of Debt
31
Financial Distress
Long-Term Financing
14
Long-term Financing: An Introduction
5
Jan. 31
6
Feb. 14
7,8
Feb. 21,28
9
Mar.6
19
20
18
Issuing Equity Securities
Long-term Debt
Dividend Policy
Derivatives
Options and Corporate Finance:
21
Basic Concepts
22
23
Extentions and Applications
Warrants and Convertibles
Hedging with Options, Futures, Forwards and Swaps
25
Derivatives and Hedging Risk
Special topics
24
Leasing
30
Mergers and Acquisitions
Corporate Finance (GRA2302)
2