FM302      Half Unit
Theories of Corporate Finance

This information is for the 2022/23 session.

Teacher responsible

Prof Martin Oehmke

Availability

This course is compulsory on the BSc in Finance. This course is not available as an outside option nor to General Course students.

Pre-requisites

Students must have completed FM213 Principles of Finance.

Course content

This course introduces concepts and theories to critically assess major corporate financial policy decisions. The course focuses in particular on a firm's capital structure and the impact of taxes, bankruptcy costs, agency conflicts, and asymmetric information on a firm’s financing decisions. We will also discuss other major topics in corporate finance, such as the market for corporate control. In developing tools to analyze these issues, we will introduce the key concepts of corporate finance theory, including debt overhang, risk shifting, and the free-rider problem.

Teaching

33 hours of seminars in the LT.

This course is taught in the interactive lecturing format. There is no distinction between lectures and classes/seminars; there are “sessions” only, and the pedagogical approach in each session is interactive.

Formative coursework

Students will be expected to produce 9 problem sets in the LT.

Indicative reading

Detailed course programmes and reading lists are distributed at the start of the course. Illustrative texts include: “Financial Markets and Corporate Strategy” by Hillier, Grinblatt and Titman. “Corporate Finance” by Ivo Welch, and “The Theory of Corporate Finance” by Tirole.

Assessment

Continuous assessment (100%) in the LT.

Key facts

Department: Finance

Total students 2021/22: 47

Average class size 2021/22: 47

Capped 2021/22: No

Value: Half Unit

Guidelines for interpreting course guide information

Course selection videos

Some departments have produced short videos to introduce their courses. Please refer to the course selection videos index page for further information.

Personal development skills

  • Problem solving
  • Application of information skills
  • Application of numeracy skills
  • Commercial awareness