HANDELSHÖGSKOLANS FAKULTETSNÄMND

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1 HANDELSHÖGSKOLANS FAKULTETSNÄMND FEA404, Industrial and Financial Management, magisterkurs, 15,0 högskolepoäng Industrial and Financial Management, Master Course, 15.0 higher education credits Avancerad nivå/second Cycle 1. Fastställande Kursplanen är fastställd av Handelshögskolans fakultetsnämnd och senast reviderad Den reviderade kursplanen gäller från och med Utbildningsområde: Samhällsvetenskapligt 100 % Ansvarig institution: Företagsekonomiska institutionen 2. Inplacering Kursen ges som fristående kurs i företagsekonomi inom avancerad nivå och läses efter genomgången utbildning på grundnivå om 180 hp varav minst 90 hp inom huvudområdet företagsekonomi, inkl kandidatuppsats 15 hp. Kursen läses i kurspaket tillsammans med FEA414 Industrial and Financial Management, magisteruppsats 15 hp. Kursen kan även ingå i Handelshögskolans civilekonomprogram/ekonomprogram. Huvudområde Företagsekonomi Fördjupning A1N, Avancerad nivå, har endast kurs/er på grundnivå som förkunskapskrav 3. Förkunskapskrav För tillträde till kursen, i kurspaket tillsammans med FEA414 Industrial and Financial Management, magisteruppsats 15 hp, krävs minst 180 hp varav minst 75 hp i företagsekonomi inklusive kandidatuppsats om 15 hp eller motsvarande. För studerande inom civilekonomprogrammet gäller de krav som där har ställts upp för antagning till kursen.

2 2/ 7 4. Innehåll Kursen består av två delkurser à 7,5 hp. Student som läst kandidatkurs i Industrial and Financial Management på grundnivå läser Corporate Valuation 7,5 hp and Financial Institutions and Markets 7,5 hp. Student som läst annan inriktning på grundnivå läser Financial Management 7,5 hp och Coporate Valuation 7,5 hp. 4.1 Financial Management 7,5 hp The focus of the course unit is on how internal and external - mainly market - information can be used to support decisions in the following areas: - The objectives of the financial decisions. Models of financial management, like portfolio theory, are used to find decision criteria. - How a company should allocate resources. Capital budgeting decisions include all long run commitments of resources from the simple decisions and the most complex large scale decisions concerning strategic projects. - How the assets can be financed in the short-run and in the long run. The choice of financial structure is one of the major long-run decisions. The aim of this course unit is to integrate a variety of specialised areas in Financial Management with corporate financial decisions and capital budgeting as main areas. The learning process is based on independent work with texts, textbook, and cases supported by lectures and seminars. After completing the course unit the student is to be able to, Summarise and explain basic and advanced practical and theoretical models concerning valuation, capital budgeting, portfolio management, and financial structure and to evaluate the models in theoretical and practical perspectives. Structure, calculate and solve standard and more advanced problems using financial models and knowledge from other business administration areas and to prepare a report about the conclusions. Design investigations in order to evaluate capital investments, investments, and capital structure in risk and value perspectives. Structure and evaluate information for such long and short run financial decisions and to adapt and utilise corporate finance models for decisions concerning specific cases, studied and reported in papers and orally in seminars. The qualitative targets for a Master of Science (60 credits) in Business Administration relate to the courses learning outcomes. Qualitative targets Knowledge and understanding Skills and abilities 2+3 Judgement and approach 2+3

3 Assessment - A written examination - learning outcome 1 and 2. - Group papers (max. 4 students in each group) - learning outcome 2 (outcome 2 may be an individual report) and 3. - Oral group presentations of group papers - the third learning outcome. 3/ 7 Due to limited resources, the written report and the oral presentation can only be assessed at a fixed examination session during the course period. A student who has failed a test twice has the right to change examiner, unless weighty argument can be adduced. The application has to be in writing and shall be sent to the Department of Business Administration. Grading scale The grades are: Fail (Underkänd), Pass (Godkänd) or Pass with Distinction (Väl godkänd). To Pass the course unit, all learning outcomes must be passed, that is the student is required to obtain at least 50% of maximum points. For Pass with Distinction the student must obtain at least 75% out of the maximum points. 4.2 Corporate Valuation 7,5 hp We will highlight the effects of different access to information when valuing for different purposes such as: mergers and acquisitions, private and public companies, and for management purpose. During the course there will be discussion on the usefulness of financial data, efficient markets, forecasting, prediction errors, and cash flow versus earnings. The course is highly participative and the extensive use of real-world cases will guide through theory and application of valuation models. This course is based on cases supported with lectures and seminars. The course is divided into several important topics in company valuation i) Understanding the financial statement Financial statements provide the fundamental information describing historic events and constitute the origin of company valuation. The students will learn the accounting principles behind valuing assets, as well as breaking down the balance sheet into operating non-operating items, and, the income statement into ordinary and unordinary items. ii) Foundations of valuation In this case, the student will learn techniques and models for estimating a firms free cash flow. Important aspects are tax effects, adjusting for R&D as well as estimating the net investment for growth calculations. The case will also discuss the correct information to be used for estimating the cost of capital. iii) Valuation from a portfolio management perspective The objective is to understand the investment philosophy of the investor. Active and passive portfolio management have different valuation purposes adopting different techniques. In this part the importance of barriers to entry is analysed, discussing the effect on volatility, distribution and growth in earnings.

4 4/ 7 iv) Valuation from a M&A perspective and Value enhancement The different classification of mergers and acquisitions will be discussed together with processes and steps in M&A activities. Motives behind, and synergy effects of M&A will be viewed both from theory and from empirical evidence. In the last case the students discuss valuation from the view of a manager. From a broad perspective, the value based management literature has brought new insight into the role of the managers, in the narrow perspective this section focus on the importance of correct depreciation schedules. After completing the course unit the student will understand and be able to 1. analyse a companys financial performance and extract information from the financial statements and produce a written report and an oral presentation. 2. apply different valuation techniques such as FCFF, FCFE, Dividend-models and relative valuation and produce a written report and an oral presentation. 3. identify and analyse a companys value driving factors, and relate these factors to the value enhancement process and produce a written report and an oral presentation 4. conduct a practical valuation of a chosen company, in collaboration with other students, and with limited information, which will be carried out from different perspectives, including a written report and an oral presentation. The qualitative targets for a Master of Science (60 credits) in Business Administration relate to the courses learning outcomes. Qualitative targets Knowledge and understanding Skills and abilities Judgement and approach 4 Assessment 1, 2 and 3 will be examined through a written exam, evaluated written group report and oral presentation. Learning outcome 4 will be examined through a written report and oral presentation. Fail to be present at oral presentation is followed by a deduction of 25 % of the received score. The learning process is based on independent work with texts, textbook, and cases supported by lectures and seminars. Due to limited resources, the written report and the oral presentation can only be assessed at a fixed examination session during the course period. A student who has failed a test twice has the right to change examiner, unless weighty argument can be adduced. The application has to be in writing and shall be sent to the department of Business Administration.

5 5/ 7 Grading scale The grades are Pass with Distinction (väl godkänd, VG), Pass (godkänd, G) or Fail (underkänd, U). In order to pass the course unit, all learning outcomes must be passed, that is the student is required to obtain at least 50 % of maximum points. For Pass with Distinction the student must obtain at least 75% out of the maximum points. The total marks are based on the sum of the points of a written exam (worth 60%) and the points of the cases, i.e. points on group papers and oral group presentations of group papers. 4.3 Financial Institutions and Markets 7,5 hp In this course unit, the functions of financial institutions and markets are analysed from the viewpoint of in vestors, professional traders and managers of corporations and financial institutions. The course unit focuses mainly on the role of financial intermediaries and financial markets in the economy. Emphasis is on the risk absorbing and risk allocating functions of banks and other financial institutions, different models and techniques for measuring and analysing the tradeoff between returns and risk as well as the financial performance of banks, and the asset and liability management (ALM) of banks. Of particular interest are the ongoing structural changes of the financial markets, including changes induced by regulatory forces as well as by the introduction of a common currency in Europe. Motives for and driving forces behind recent mergers and acquisitions within the industry are discussed. Why do, for instance, banks merge with insurance companies? How does the entrance of new niche banks affect the competition on financial markets? Further, the performance measure ment and management control in banks are studied. Special emphasis is then put on pricing strategies applied by banks, their development of new financial products and services and the increasing use of electronic payments. What is the relationship between pricing strategy and competitive ness? How should pricing be designed in order to stimulate an efficient use of payment services? This part is followed by an analysis of bank risk and the management of bank risk through the use of appropriate financial derivative securities. Risk measurement, derivative packages, and hedging strategies are key concepts here. Through out the course, reference is made to current research in banking, nationally and internationally. The overall objective of the course unit is to give the students a comprehensive understanding of the central role of financial institutions in the economy, particularly emphasizing: Functions and missions of financial institutions and markets Structural changes and competition in the financial sector Performance measurement and management control in banks Asset and Liability Management Use of Financial Derivatives

6 6/ 7 After completing the course unit, the students will be able to: 1. describe, examine and evaluate financial institutions and products with respect to risk and return as well as market conditions in terms of accessibility, competition and regulatory regime 2. select and apply adequate analytical methods and techniques, in collaboration with other students, to analyse different practical decision problems of financial institutions and markets and produce a written report and an oral presentation. The qualitative targets for a Master of Science (60 credits) in Business Administration relate to the courses learning outcomes. Qualitative targets Knowledge and understanding 1+2 Skills and abilities 2 Judgement and approach 1 Assessment Learning outcome 1 will be assessed by a written exam, whereas learning outcome 2 will be assessed by case studies. The case studies should be presented orally as well as in writing during the semester that the students are initially registered on the course. Both the written exam and the case studies will be graded. Special attention will be paid to active participation at the presentation of case study reports. Due to limited resources, the case studies and the oral presentation can only be assessed at a fixed examination session during the course period. A student who has failed an exam twice has the right to apply for another examiner, unless weighty arguments can be adduced. The application must be in writing and shall be sent to the Department of Business Administration. Grading scale The grades are: Pass with Distinction (Väl godkänd, VG), Pass (Godkänd, G) and Fail (Underkänd, U). To pass the course unit, all learning outcomes must be passed, i. e. at least 40 % of the total points on the written exam and at least 50 % of the total points of both examination forms are required. For Pass with Distinction, at least 75 % of the total points are required.

7 7/ 7 5. Mål Efter avslutad kurs ska studenten kunna beskriva och förklara grundläggande praktiska och teoretiska samband inom områdena investeringsbedömning, investeringsteori, portföljförvaltning, kapitalstruktur samt värdering av fysiska resurser och värdepapper med hänsyn till risk. systematisera och värdera information för investeringsbedömning, värdering av finansiella instrument och bedömning av finansiell struktur. tillämpa och anpassa teoretiska modeller för användning vid operativa, finansiella och strategiska beslut. bedöma modeller med hänsyn till teoretiska och praktiska förutsättningar samt lösa modellbaserade exempel och anpassa modellerna. Kursens lärandemål operationaliseras och länkningen till examinationsformer görs på delkursnivå. 6. Litteratur Se separat litteraturlista. 7. Former för bedömning Se respektive delkurs under punkt 4 ovan. Student som underkänts två gånger på prov för viss kurs eller del av kurs har rätt att hos Företagsekonomiska institutionen begära byte av examinator. 8. Betyg Betygsskalan omfattar betygsgraderna Underkänd (U), Godkänd (G), Väl godkänd (VG). För betyget Godkänd på hel kurs 15 hp krävs betyget G på båda delkurserna à 7,5 hp vardera. För betyget VG krävs VG på minst en av två teoridelkurser à 7,5 hp samt lägst betyget G på resterande delkurs. 9. Kursvärdering Varje delkurs avslutas med en skriftlig kursutvärdering. 10. Övrigt Undervisningsspråk: engelska. Kursen gavs första gången höstterminen Överlappning med andra kurser kan förekomma. Sådana kurser kan inte tillgodoräknas i samma examen.