Dr James Clark

Dr Jojo Paul

This course is available with permission to General Course ‘Spring Semester’ students.

Students must have completed: one level 1 Economics course (either EC100 Economics A or EC102 Economics B), one level 1 Mathematics course and one level 1 Statistics course. In addition, students will also be expected to have a working familiarity with the content covered in the Michaelmas Term portion of FM212; students will be provided resources to review this material before commencing the course.

The course examines the theory of financial decision-making by firms and examines the behaviour of the capital markets in which these decisions are taken. The topics covered are the theory of capital budgeting under certainty in perfect and imperfect capital markets, sources of funds, basic theory of capital structure and the cost of capital, company dividend decisions, and risk management.

This course covers the same topics as the Lent Term portion of FM213 and FM212. Thus, both FM213 and FM212 are equivalent content-wise. However, compared to FM213, this course puts less emphasis on the underlying statistical theory and relies less on the use of mathematical methods. Nonetheless, the course is quantitative in nature, and familiarity with mathematical and statistical methods taught in first-year courses will be assumed.

21 hours of lectures and 10 hours of classes in the LT. 1 hour of classes in the ST.

There will also be workshops in LT.

Students are expected to produce written work for classes and to make positive contributions to class discussion.

Detailed course programmes and reading lists are distributed at the start of the course. Illustrative texts include: 

• Principles of Corporate Finance by Richard Brealey, Stewart Myers, and Franklin Allen, McGraw-Hill Inc.
• Corporate Finance by Jonathan Berk and Peter DeMarzo, Pearson Global Edition.

Exam (100%, duration: 1 hour and 30 minutes) in the summer exam period.