FM302      Half Unit
Theories of Corporate Finance

This information is for the 2025/26 session.

Course Convenor

Availability

Requisites

Pre-requisites:

Students must have completed FM215 and FM214 and FM200 before taking this course.

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 analyse 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 Winter Term.

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 9 problem sets in the WT.

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.

Continuous assessment (100%)