FM470      Half Unit
Corporate Finance Theory

This information is for the 2025/26 session.

Course Convenor

Prof Amil Dasgupta

Availability

This course is compulsory on the MRes in Finance. This course is available on the MRes in Economics and MSc in Finance and Economics. This course is not available as an outside option to students on other programmes. This course uses controlled access as part of the course selection process.

All students on a programme listed under the Course Availability will be given a place. The course is not capped. The course is available with permission as an outside option.

Please contact finance.teachingmanager@lse.ac.uk with any queries.

Requisites

Assumed prior knowledge:

The course is designed for first-year PhD students in Finance. Familiarity with microeconomics and game theory at the level of standard first-year PhD coursework will be assumed and is necessary.

Course content

This course focuses on the theory of corporate finance. It is subdivided into two parts. The first part reviews some of the classical concepts in corporate finance, using tools from game theory and contract theory to study incentive and information problems at the level of the firm, and examines how financial contracts can be designed to mitigate these problems. This part of the course also considers how takeovers and ownership concentration can help to mitigate conflict of interests among insiders and investors in firms. The second part focuses on the theory of financial intermediation. This component first reviews classic theories of banking while also introducing students to recent developments in the field. The course then introduces students to asset managers as financial intermediaries, examining their role in financial markets and corporate governance.

Teaching

30 hours of seminars in the Winter Term.

Indicative reading

Readings will be mainly based on journal articles and working papers. Some useful reference textbooks: 

  • Tirole, Jean, The Theory of Corporate Finance, 2006, Princeton University Press.
  • Freixas, X. and Rochet, J.C., The Microeconomics of Banking, 1997, MIT Press.

Assessment

Continuous assessment (100%)


Key facts

Department: Finance

Course Study Period: Winter Term

Unit value: Half unit

FHEQ Level: Level 7

Keywords: Corporate Finance, Banking, Financial Intermediation, Financial Markets

Total students 2024/25: Unavailable

Average class size 2024/25: Unavailable

Controlled access 2024/25: No
Guidelines for interpreting course guide information

Course selection videos

Some departments have produced short videos to introduce their courses. Please refer to the course selection videos index page for further information.

Personal development skills

  • Leadership
  • Self-management
  • Team working
  • Problem solving
  • Application of information skills
  • Communication
  • Application of numeracy skills
  • Commercial awareness
  • Specialist skills