This intensive course is designed to deliver a greater understanding of asset markets and corporate finance.
Students will learn about the theory and application of Financial Securities and Corporate Finance. The course broadly covers financial instruments, such as equity and fixed income and derivative securities, as well as key concepts in Corporate Finance.
Part 1: Asset-markets
This section offers a unified perspective of modern valuation methods in the context of three important asset classes – fixed income, stocks, and derivatives. The course will then proceed to fixed-income securities, before moving onto stocks, starting with basic notions of risk, return, diversification, and portfolio theory. Capital asset pricing model (CAPM) will be discussed, before examining whether the market values stocks efficiently, or whether there are “abnormal” returns leading to large profits.
Part 2: Corporate Finance
The questions addressed in this part of the course can be divided into two broad sets.
Decisions regarding how to spend funds on alternative investment projects (also known as capital budgeting). Here the course will describe the alternative techniques commonly employed to assess investment opportunities.
How to raise the funds necessary to finance those investments. Firms’ decisions over debt/equity ratios will be analysed here. This analysis will then be broadened 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.
Dates: 22 June – 10 July 2020
Lecturers: Dr Dong Lou and Dr Georgy Chabakauri
Dates: 3 August – 21 August 2020
Lecturers: Dr Ashwini Agrawal and Dr Thummim Cho
(Due to popularity, this course is repeated and can be taken in either of the sessions outlined above.
Level: 200 level. Read more information on levels in our FAQs
Fees: Please see Fees and payments
Lectures: 36 hours
Classes: 18 hours
Assessment*: One examination and one essay
Typical credit**: 3-4 credits (US) 7.5 ECTS points (EU)
*Assessment is optional
**You will need to check with your home institution
For more information on exams and credit, read Teaching and assessment
Elementary quantitative methods or Introductory Microeconomics (to the level of EC101)
- Net Present Value technique
- Introduction to portfolio theory
- The Capital Asset Pricing Model (CAPM)
- Stock market efficiency
- Forward and futures contracts, option pricing
- Investment decisions and the significance of real options
- Capital structure and dividend decisions
- Capital restructuring: Initial Public Offerings
Students will learn about the theory and application of Financial Securities and Corporate Finance. The course broadly covers financial instruments, such as equity and fixed income and derivative securities, as well as key concepts in Corporate Finance. It will also enhance a student's understanding of how firms choose their capital structure, conflicts between shareholders and debt holders, pay-out policy, and initial public offerings.
LSE’s Department of Finance enjoys a pre-eminent reputation for the excellence of their teaching and research, and for their leading role in public-policy issues. The 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.
LSE’s Department of Finance is closely associated with LSE’s Financial Markets Group and Systemic Risk Centre which regularly hosts a wide variety of seminars, conferences and public addresses by leading academics and practitioners. The Department, along with the Departments of Accounting and Management, was ranked as the UK leader for Business and Management Studies in the 2014 Research Excellence Framework. The Department’s excellence in research and world-class faculty set them apart as global leaders in the field of finance.
On this three-week intensive programme, you will engage with and learn from full-time lecturers from the LSE’s finance faculty.
R. Brealey, S. Myers & F. Allen, Principles of Corporate Finance, 13th edition, McGraw-Hill (2019)
Jonathan Berk, Peter De Marzo, Corporate Finance, Pearson International Edition (2007)
*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