Dr James Clark

Dr Jojo Paul

This course is available on the BSc in Accounting and Finance, BSc in International Social and Public Policy and Economics, BSc in Management and Diploma in Accounting and Finance. This course is available as an outside option to students on other programmes where regulations permit. This course is available with permission to General Course students.

This course cannot be combined with FM213.

Permission forms from the General Course admin office should be submitted to the Department of Finance by email at finance@lse.ac.uk with a copy of the transcript attached.

This course has a limited number of places (it is controlled access). In previous years we have been able to provide places for all students that apply but that may not continue to be the case.

Students must have completed: one level 1 Economics course, one level 1 Mathematics course and one level 1 Statistics 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, portfolio theory, equity and bond markets, the capital asset pricing model, efficient markets, derivative pricing, sources of funds, basic theory of capital structure and the cost of capital, company dividend decisions and financial markets and institutions.

This course covers the same topics as FM213. 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.

20 hours of lectures and 10 hours of classes in the AT. 20 hours of lectures and 10 hours of classes in the WT. 1 hour of lectures and 1 hour of classes in the ST.

There will also be workshops in both AT and WT.

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: 3 hours) in the spring exam period.