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FM350: Advanced Corporate Finance


Course Content

This course focuses on theoretical issues which arise in modern corporate finance, and its major theme will be the firm's capital structure and pay-out decision.

We will see that under certain assumptions, this decision is irrelevant; this is the Modigliani and Miller Theorem. These assumptions will then be loosened to see when it may be better for firms to issue debt versus equity, or to repurchase shares rather than pay out dividends.

In the final part of the course we will learn about real options and apply this to study the optimal policy of a firm raising capital to finance risky investment.

Topics covered will include:

  • A review of valuations
  • Modigliani and Miller
  • Taxes
  • Recapitalisation
  • Bankruptcy and distress
  • Private Information
  • Dividend policy
  • Optimal capital structure
  • Investment under constraints
  • Real options

Course Outcomes

This course is a broad overview of major topics in Corporate Finance. Students are assumed to have seen many of the topics in earlier courses; however this course provides more in depth coverage. The topic of capital structure is covered in FM250 Finance. However, FM250 provides only a brief overview. Advanced Corporate Finance will build on that by taking the decisions of the firm as the main topic. We will spend significant amounts of time on topics beyond the scope of FM250, such as taxes, bankruptcy, private information, signalling, and real options.

World-class LSE teaching

The LSE’s Department of Finance has grown in recent years to become one of the largest and most highly-regarded finance groups in the UK and Europe. On this three week intensive programme, you will engage with and learn from full-time lecturers from the LSE’s finance faculty. FM350 course lecturer, Dr Juanita Gonzalez-Uribe, teaches on a number of our undergraduate and graduate Finance modules, including Corporate Finance.


M. Grinblatt and S. Titman, Financial Markets and Corporate Strategy, McGraw-Hill (2001).

*A more detailed reading list will be supplied prior to the start of the programme

**Course content, faculty and dates may be subject to change without prior notice



Session: Three

Dates: 31 July - 18 August 2017

Lecturer: Dr Hongda Zhong
Dr Ashwini Agrawal 

Level: 300 level

Fees: Click here for information

Prerequisites: Finance (to the level of FM250) OR introductory microeconomics (to the level of EC101)

Lectures: 36 hours 

Classes: 18 hours

Assessment*:  Two written examinations

Typical credit**: 3-4 credits (US)
7.5 ECTS points (EU) 

How to apply?

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*assessment is optional – see FAQs

**You will need to check with your home institution. Read more about credit transfer here.