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.
Please contact finance.teachingmanager@lse.ac.uk with any queries.
This course is available to MSc Finance and Economics students with permission from the MSc Finance and Economics Programme Director.
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: NoCourse 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