Program Overview

Course Overview

The course AI2144 Corporate Finance is a 7.5 credit course offered at KTH Royal Institute of Technology.

Information per Course Offering

• Termin: Spring 2026
• Start: 13 Jan 2026
• Duration: 13 Jan 2026 - 13 Mar 2026
• Periods: Spring 2026: P3 (7.5 hp)
• Pace of study: 50%
• Application code: 60136
• Form of study: Normal Daytime
• Language of instruction: English
• Number of places: Places are not limited
• Target group: Conditionally elective for students in the master programme in Real Estate and Construction Management (TFOBM), year 1. Open for all master programs.

Course Syllabus

Content and Learning Outcomes

The course covers:

• Interest rates and bond valuation
• The relationship between financial leverage, risk, and return
• The Modigliani and Miller theory of capital structure in a perfect capital market and the effect of market imperfections on a firm's choice of capital structure
• Dividend policy
• The main methods of capital budgeting with leverage and market imperfections
• The process of raising equity capital and debt financing

After completing the course, students should be able to:

• Describe and explain the main factors affecting interest rates and value risk-free and risky bonds
• Describe and explain Modigliani and Miller's theory of irrelevance of the capital structure for the value of a firm in perfect capital markets
• Describe, explain, compare, and critically discuss how market imperfections may affect a firm's choice of capital structure
• Describe and explain different ways of distributing capital to shareholders and Modigliani and Miller's theory of irrelevance of dividend policy for the value of a firm in perfect capital markets
• Describe, explain, compare, and critically discuss the main methods for capital budgeting with leverage and market imperfections
• Describe and explain the process of raising equity capital and debt financing for new and mature firms

Literature and Preparations

• Specific prerequisites: Knowledge in quantitative methods equivalent to the content in the course AI2152
• Literature: Information about course literature can be found in the course memo for the course offering or in the course room in Canvas

Examination and Completion

Grading Scale

• A, B, C, D, E, FX, F

Examination

• TEN1 - Examination, 5.5 credits, grading scale: A, B, C, D, E, FX, F
• PRO1 - Project, 2.0 credits, grading scale: P, F

Other Requirements for Final Grade

• Project work (PRO1), 2.0 hp, with grade P and written exam (TEN1), 5.5 hp, with grade E or higher

Examiner

• Åke Gunnelin

Ethical Approach

• All members of a group are responsible for the group's work
• In any assessment, every student shall honestly disclose any help received and sources used
• In an oral assessment, every student shall be able to present and answer questions about the entire assignment and solution

Further Information

Offered by

• ABE/Real Estate Economics and Finance

Main Field of Study

• Industrial Management, The Built Environment

Education Cycle

• Second cycle