FM250: Finance

Corporate finance involves the structure of capital and funding sources that ultimately impact the financial health of a firm.

Through the analysis of short and long-term financial objectives, companies need to create strong financial plans to ensure sustained growth. Having a comprehensive grounding in corporate finance will increase your ability to make robust business decisions based on sound financial principles.

This course is divided into two halves. The first half will give you an integrated view of three important asset classes: fixed income securities, stocks and derivatives. Through rigorous engagement with the course material, you will build your knowledge of the key concepts of risk, return, diversification, portfolio theory, market efficiency theory and the Capital Asset Pricing Model (CAPM). You will also build an understanding of derivative instruments like forwards, futures, options and swaps, and their practical application in trading.

The second half of the course focuses on corporate finance and will allow you to build your strategic thinking skills in this area. By engaging with the literature, you will understand how firms analyse and decide which investment opportunities they should pursue, as well as the different options for raising the necessary funds to finance those investments.

On completion of the course, you will have a deeper understanding of how firms choose their capital structure, the conflicts between shareholders and debt holders that influence how firms are run, and incentives to adopt riskier strategies as a function of overall leverage.

Prerequisites: Elementary quantitative methods or Introductory Microeconomics (to the level of EC101)

Level: 200 level. Read more information on levels in our FAQs

Fees: Please see Fees and payments

Lectures: 36 hours

Classes: 18 hours

Assessment: Two examinations

Typical credit: 3-4 credits (US) 7.5 ECTS points (EU)

Please note: Assessment is optional but may be required for credit by your home institution. Your home institution will be able to advise how you can meet their credit requirements. For more information on exams and credit, read Teaching and assessment

This intensive course is ideal if you are looking to develop a greater understanding of asset markets and corporate finance. This course is suitable for you if you wish to enter the financial services industry or move into strategic management positions within a firm.

• Apply financial securities and corporate finance theory to real-world cases
• Identify modern valuation methods for fixed income, stocks and derivatives
• Understand the value of different capital structures
• Analyse how to spend funds on alternative investment projects
• Describe the alternative techniques commonly employed to assess investment opportunities

The design of this course is guided by LSE faculty, as well as industry experts, who will share their experience and in-depth knowledge with you throughout the course.