FM302 Half Unit
Theories of Corporate Finance
This information is for the 2020/21 session.
Prof Martin Oehmke
This course is compulsory on the BSc in Finance. This course is not available as an outside option nor to General Course students.
Students must have completed Principles of Finance (FM212 or FM213), Mathematical Methods (MA100) and Elementary Statistical Theory (ST102). Introduction to Econometrics, Principles of Econometrics or other statistics courses where at least linear regression models are covered are recommended but not required. Students who have not taken Principles of Finance, but have an excellent quantitative background, may be allowed to take this course at the discretion of the course leader.
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.
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.
Students will be expected to produce 10 problem sets in the LT.
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.
Coursework (40%), coursework (50%) and class participation (10%) in the LT.
Important information in response to COVID-19
Please note that during 2020/21 academic year some variation to teaching and learning activities may be required to respond to changes in public health advice and/or to account for the situation of students in attendance on campus and those studying online during the early part of the academic year. For assessment, this may involve changes to mode of delivery and/or the format or weighting of assessments. Changes will only be made if required and students will be notified about any changes to teaching or assessment plans at the earliest opportunity.
Total students 2019/20: 34
Average class size 2019/20: 35
Capped 2019/20: No
Value: Half Unit
Personal development skills
- Problem solving
- Application of information skills
- Application of numeracy skills
- Commercial awareness