Dr Cynthia Balloch

This course is compulsory on the MSc in Accounting and Finance. This course is available on the MSc in Econometrics and Mathematical Economics, MSc in Economics, MSc in Economics (2 Year Programme) and MSc in Finance and Risk. 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. For information on controlled access courses, including eligibility, application processes, deadlines, and departmental contact details, please refer to the Controlled Access Courses webpage.

All students on a programme listed above that request a place will be given one. This course is closed to outside students and does not permit auditing students. Outside students should consider taking FM474 Managerial Finance as an alternative option instead.

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

This course cannot be combined with FM474 Managerial Finance.

Mutually exclusive courses:

This course cannot be taken with FM431W or FM473A or FM473W or FM474A or FM474W at any time on the same degree programme.

Additional requisites:

Basic Mathematics and Statistics knowledge. The course is self-contained but it covers a broad set of topics. Some prior knowledge of economics, finance and accounting is advised.

The course provides a broad introduction to a range of key topics in corporate finance. The first part of the course investigates how companies finance their activities by issuing debt, equity, and other securities, and the interaction of business policy with financial policy. This illustrates the driving forces behind capital structure decisions and choices over debt and equity finance. Special consideration is given to the tax implications of those choices, the possible costs of financial distress, the incentive implications of financial decisions and the signalling impact of those for financial market participants. The second part of the course covers project valuation, discount rates, how future cash flows are discounted accounting for differences in capital structure and establishes how companies should select their investments. The course combines conceptual material with a series of cases, with an emphasis on the application of theory to real business decisions.

20 hours of lectures and 10 hours of seminars in the Autumn Term.

Students will be set weekly formative assignments. Solutions and guidance will be provided during the weekly lecture and seminar classes. 

J. Berk and P. DeMarzo, Corporate Finance, Pearson International Edition. Full details of reading will be specified in the Course Programme and Reading List which will be distributed at the first lecture.

Exam (90%), duration: 90 Minutes, reading time: 10 minutes in the January exam period.

Continuous assessment (10%).