Prof David Webb OLD M3.09

This course is available on the MSc in Accounting and Finance, MSc in Economics and Managment, MSc in Finance (full-time), MSc in Finance (part-time), MSc in Finance and Economics, MSc in Finance and Economics (Research) and MSc in Finance and Private Equity. This course is not available as an outside option.

Students must have completed Corporate Finance and Asset Markets (FM430).

This is an advanced course; students will be expected to have a strong background in Micro Economics and be comfortable with mathematical arguments. Coverage of the material in FM430 Corporate Finance and Asset Markets is normally required as a prerequisite for this course.

Provides a thorough grounding in recent developments in the theory of corporate finance. The course involves an advanced development of theories of corporate financial policy and corporate governance, going public, takeovers and insolvency. The development of these theories involves applying the modern theories of agency, asymmetric information and game theoretic ideas. Applications of the economics of incomplete contracts to the problems of ownership and control and financial decisions will also be developed.

20 hours of lectures, 3 hours of lectures and 9 hours of seminars in the LT. 4 hours of lectures in the ST.

Written answers to problems will be expected on a weekly basis. There will also be an unassessed assignment.

The Theory of Corporate Finance by Jean Tirole (Princeton University Press, 2006) covers much of the material. Some additional material can be found in O D Hart, Firms Contracts and Finance Structure (Oxford University Press, 1995) and C W Smith, The Modern Theory of Corporate Finance (McGraw-Hill, 1990). A set of lecture notes and a study pack of journal articles will be provided.

Exam (100%, duration: 2 hours) in the main exam period.