The following are some suggested readings that may prove helpful to you in preparing for your arrival at LSE, and for finding out about some of the courses that you may be interested in taking.
It is not essential that you read all the books on the list during the Summer - the intention is simply to give you an idea of the level and range of material covered in the various courses. For most of the courses, the readings listed below are those recommended in the course guides. So if you decide to take any of these courses, you will probably be asked to read these books during the course of your studies. You should, however check the course guides when you register for your courses at the start of term to confirm what reading is required for the course. It is possible that one or two of these readings are updated over the summer.
Core courses
- Axelson, U, Jenkinson, T, Stromberg, P and Weisbach, M.S, 2007, "Leverage and Pricing in Buyouts: An Empirical Analysis
- Kaplan, S.N and Stromberg, P, 2008, "Leveraged Buyouts and Private Equity", Social Sciences Research Network
- Cendrowski, H, 2008, "Private Equity and Operations Assessment" Hoboken: John Wiley & Sons
- Lerner, J, 2000, "Venture Capital and Private Equity: A Casebook" New York: John Wiley & Sons
- Acharya, V.V, Franks J,R and Servaes, H, 2007, "Private Equity: Boom and Bust?" Journal of Applied Corporate Finance, 19 (4), 44-53
- Berk and DeMarzo, Corporate Finance, 2nd edition (Pearson Global edition)
- Higgins, Analysis for Financial Management, 9th edition
- Berk and DeMarzo, Corporate Finance, 2nd edition (Pearson Global edition)
- Bodie, Kane, and Marcus, Investments, 8th edition
Optional courses
- Sundaresan, S. (2001). Fixed Income Markets and Their Derivatives. South Western College Publishing.
- Duffie, D. and K. Singleton (2003). Credit risk. Pricing, management and measurement. Princeton: Princeton University Press (Princeton Series in Finance).
- Ho, T.S.Y. and S.B. Lee (2004). The Oxford Guide to Financial Modeling. Oxford University Press.
- Tuckman, B. (2002). Fixed Income Securities. John Wiley & Sons.
- Veronesi, P. (2010) Fixed Income Securities: Valuation, Risk, and Risk Management. John Wiley & Sons.
- Wilmott, P. (2000). Paul Wilmott on Quantitative Finance. John Wiley & Sons.
- Modern portfolio theory and investment analysis, by E. J. Elton, M. J.Gruber, S. J. Brown, and W. N. Goetzmann, Wiley Press
- Modern investment management, by Bob Litterman and the Quantitative Resource Group, GSAM, Wiley Press
- Investments, by Z. Bodie, A. Kane and A. Marcus, McGraw-Hill Irwin
- Higgins, Robert C. Analysis For Financial Management 8th edition (McGraw-Hill 2007)
No one book covers the material of the entire course. Books recommended include:
- The Volatility Surface: A Practitioner's Guide by Jim Gatheral,
- Option Pricing Models and Volatility by Maurice Rouah and Gregory Vainberg
- Derivatives Markets, 2nd edition, by Robert McDonald
- Options, Futures and Other Derivatives by John Hull
- Principles of Financial Engineering by Salih Neftci
- Financial Engineering by Keith Cuthbertson and Dirk Nitzsche
The main reference is:
- John C. Hull, Risk Management and Financial Institutions, Prentice Hall, 2012, 3rdedition.
Additional useful references are:
- Michel Crouhy, Dan Galai and Robert Mark, Risk Management, McGraw-Hill, 2001.
- Philippe Jorion, Value at Risk, McGraw-Hill, 2007, 3rd edition.
- John C. Hull, Options, Futures and Other Derivatives, Pearson, 2012, 8th edition.
- Darrell Duffie and Ken Singleton, Credit Risk, Princeton University Press, 2003.
Books:
- Greenwald, B, Kahn, J., P. Sonkin, M. van Biema, Value Investing: From Graham to Buffett and Beyond, Wiley Finance, 2004.
Academic Articles:
- Berk, J. R. Green and V. Naik, “Optimal Investments, Growth Options and Security Returns,” Journal of Finance, 1999.
- Berk, J. R. Green and V. Naik, “Valuation of New Ventures,” Review of Financial Studies, 2004.
- Black, F. and J. Cox, “Valuing Corporate Securities: Some Effects of Bond Indenture Provisions,” Journal of Finance, 1976.
- Gamba, A., and A. Triantis, “The Value of Financial Flexibility,” Journal of Finance, 2008.
- Collin-Dufresne, P., and R. Goldstein, “The Determinants of Credit Spread Changes,” Journal of Finance, 2001.
- Merton, R., “On the Pricing of Corporate Debt: The Risk Structure of Interest Rates,” Journal of Finance, 1974.
- Novy-Marx, R., “The Other Side of Value: The Gross Profitability Premium,” Journal of Financial Economics, 2013.
- Piotroski, J.D., “Value Investing: The Use of Financial Statement Information to Separate Winners from Losers,” Journal of Accounting Research, 2000.
- Ritter, J., “Economic Growth and Equity Returns,” Pacific-Basin Finance Journal, 2005.
- Shumway, T., and B. Sharath, “Forecasting Default with the Merton Distance to Default Model,” Review of Financial Studies, 2008.
Cases:
- Dell’s Working Capital
- Marriott Corporation
- Diageo PLC
- Bidding for Antamina
- Pinkerton (B)
- The Chrysler Takeover Attempt
- Kohler Co.
- Honeywell, inc and integrated risk management
- Jaguar PLC, 1989
- Telecom Argentina
Reference text book:
- Berk and DeMarzo, Corporate Finance, 2nd edition (Pearson Global edition)
Articles:
- Almeida, Heitor, and Thomas Philippon, 2008, “Estimating Risk-Adjusted Costs of Financial Distress,” Journal of Applied Corporate Finance 20:4, 105–111
- Andrade, Gregor, Mark Mitchell, and Erik Stafford, 2001, “New Evidence and Perspectives on Mergers”, Journal of Economic Perspectives, 15 (2), 103-120.
- Andrade, Gregor and Steven N. Kaplan (1998), “How Costly is Financial (not Economic) Distress? Evidence from Highly Leveraged Transactions that Become Distressed,” Journal of Finance 53, 1443-1493.
- Bodily, Samuel E., 2005, “Real Options”, Darden case study UV0433-PDF-ENG
- Bruner, Robert F., Kenneth M. Eades, Robert S. Harris, and Robert C. Higgins, 1998, "Best Practices in Estimating the Cost of Capital: Survey and Synthesis", Financial practice and education, spring / summer 1998, 13–28.
- Crane, Dwight B., and Indra A Reinbergs, “Note on Valuing Private Businesses,” HBS case 9-201-060
- Froot, Kenneth, David Scharfstein, and Jeremy Stein, 1994, "A Framework for Risk Management," Harvard Business Review 72, (November-December 1994): 59-71.
- de Heer, Marco, and Timothy M. Koller, 2000, “Valuing Cyclical Companies,”, McKinsey Quarterly 2000:2
- Graham, John (2000), “How big are the tax benefits of debt?,” Journal of Finance55, 1901–1941.
- Holmström, Bengt and Steven Kaplan, 2001, “Corporate Governance and Merger Activity in the United States: Making Sense of the 1980s and 1990s”, Journal of Economic Perspectives, 15 (2), 121-44.
- Holmström, Bengt, and Kaplan, Steven N., 2003, "The state of US corporate governance: what's right and what's wrong?" Journal of Applied Corporate Finance, Spring 2003.
- James, Mimi, and Timothy M. Koller, “Valuation in Emerging Markets,” McKinsey Quarterly 2000:4
- Jensen, Michael C., 1986, "Agency Costs of Free Cash Flow, Corporate Finance and Takeovers", American Economic Review, 76:323-329.
- Jensen, Michael C., 1988, "Takeovers: Their Causes and Consequences," The Journal of Economic Perspectives 2, 21-48.
- Jensen, Michael, 1993, "The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems", Journal of Finance, Vol. 48, No. 3, 831–880
- Kaplan, Steven N., 1999, "A Note on International Valuation," working paper, University of Chicago.
- Kaplan, Steven N., 2002, "A Note on Discounted Cash Flow Valuation Methods," working paper, University of Chicago.
- Kaplan, Steven N., and Richard S. Ruback, 1995, “The Valuation of Cash Flow Forecasts: An Empirical Analysis,” Journal of Finance 50:4, 1059-1093
- Lerner, Josh, “A Note on the initial public offering process,” HBS case 9-200-018
- Myers, Stewart C., 2001, "Capital Structure," Journal of Economic Perspectives15, 81-102
- Opler, Tim, M. Saron, & S. Titman, 1997, "Designing Capital Structure to Create Shareholder Value," Journal of Applied Corporate Finance 10.1, 21–32
- Ritter, Jay, “Investment Banking and Securities Issuance”, Chapter 5 in Handbook of the Economics of Finance, edited by G. M. Constantinides, M. Harris and R. Stultz, Elsevier 2003.
- Ritter, Jay, and Ivo Welch, 2002, “A Review of IPO Activity, Pricing and Allocations,” Journal of Finance 57:4, 1795-1828.
- Smith, Clifford W., 1986, "Raising Capital: Theory and Evidence" Midland Corporate Finance Journal, Vol. 4, No. 1, 6-22.
- Venture Capital, Private Equity, and the Financing of Entrepreneurship' J.Lerner, A. Leamon and F.Hardymon (Wiley)
- The Oxford Handbook of Entrepreneurial Finance' (OUP)
- Entrepreneurial Finance', J.C.Leach and R.Melicher (Cengage)
- International Financial Management by C. S. Eun and B. G. Resnick, McGraw-Hill Education; 8th edition (2017)
- International Financial Management by G. Bekaert and R. Hodrick, Cambridge University Press; 3rd edition (2017)