Corporate Finance

This information is for the 2013/14 session.

Teacher responsible

Dr Amil Dasgupta OLD 3.45, Prof Christopher Polk OLD 4.23 and Prof Daniel Ferreira OLD M2.17


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


Aimed at people with a good undergraduate degree and good quantitative skills, with some knowledge of economics.

Course content

The aim of the course is to provide a comprehensive overview of firms' financial decision making. Corporate finance questions can be divided into two broad sets. Decisions regarding how to spend funds on investment projects constitute one part, usually referred to as capital budgeting. This part of the course will describe the various techniques commonly employed to assess investment opportunities. Particular attention will be given to the need to properly evaluate the risk associated with each investment project. Methods like the Adjusted Present Value or the weighted average cost of capital will be presented. The other main set of questions regards how to raise funds necessary to finance those investments. There, firms' decisions over debt/equity ratios will be analysed. Attention will be paid to differential tax treatments of debt and equity incomes. The implications of the possibility of bankruptcy will also be taken into account. The analysis will then broaden to allow for the possibility that debt/equity choices may affect how firms are run. Incentives to adopt riskier strategies as a function of overall leverage will be considered, as will the debt overhang problem. The course will also cover a number of specific topics. Firms' decisions to pay dividends will be studied. The factors behind the decision to go public, i.e. to trade securities in a public market, will then be presented. The market for takeovers and mergers will be examined, as will the topical issue of corporate


40 hours of lectures and 20 hours of classes. MSc Finance (part-time) taught MT and LT (evenings). MSc Finance (full-time) taught MT (daytime).

Formative coursework

Regular classworks will be completed, handed in and marked as part of formative assessment for this course.

Indicative reading

The recommended textbooks for this course are Berk and DeMarzo, Corporate Finance 2008 and Higgins, Analysis for Financial Management, 9th Edition. Other recommended readings from relevant journal articles will be included in a study pack.


Exam (80%, duration: 3 hours) in the main exam period.
In class assessment (20%) in the MT and LT.

Key facts

Department: Finance

Total students 2012/13: 163

Average class size 2012/13: 53

Value: One Unit

Guidelines for interpreting course guide information

Personal development skills

  • Team working
  • Problem solving
  • Communication
  • Application of numeracy skills
  • Commercial awareness
  • Specialist skills

Course survey results

(2010/11 - 2012/13 combined)

1 = "best" score, 5 = "worst" score

The scores below are average responses.

Response rate: 50.9%



Reading list (Q2.1)


Materials (Q2.3)


Course satisfied (Q2.4)


Lectures (Q2.5)


Integration (Q2.6)


Contact (Q2.7)


Feedback (Q2.8)


Recommend (Q2.9)