Corporate finance involves the structure of capital and funding sources that ultimately impact the financial health of a firm. Through the analysis of short and long-term financial objectives, companies need to create strong financial plans to ensure sustained growth. Having a comprehensive grounding in corporate finance will increase your ability to make robust business decisions based on sound financial principles.
This course is divided into two halves. The first half will give you an integrated view of three important asset classes: fixed income securities, stocks and derivatives. Through rigorous engagement with the course material, you will build your knowledge of the key concepts of risk, return, diversification, portfolio theory, market efficiency theory and the Capital Asset Pricing Model (CAPM). You will also build an understanding of derivative instruments like forwards, futures, options and swaps, and their practical application in trading.
The second half of the course focuses on corporate finance and will allow you to build your strategic thinking skills in this area. By engaging with the literature, you will understand how firms analyse and decide which investment opportunities they should pursue, as well as the different options for raising the necessary funds to finance those investments.
On completion of the course, you will have a deeper understanding of how firms choose their capital structure, the conflicts between shareholders and debt holders that influence how firms are run, and incentives to adopt riskier strategies as a function of overall leverage.
Session: One - Applications closed
Dates: 21 June – 9 July 2021
Dates: 2 – 20 August 2021
(Due to popularity, this course is repeated and can be taken in either of the sessions outlined above.
Level: 200 level. Read more information on levels in our FAQs
Fees: Please see Fees and payments
Lectures: 36 hours
Classes: 18 hours
Assessment*: Two examinations
Typical credit*: 3-4 credits (US) 7.5 ECTS points (EU)
*Assessment is optional, but may be required for credit by your home institution. Your home institution will be able to advise how you can meet their credit requirements.
For more information on exams and credit, read Teaching and assessment
Elementary quantitative methods or Introductory Microeconomics (to the level of EC101)
- Net Present Value technique
- Introduction to portfolio theory
- The Capital Asset Pricing Model (CAPM)
- Stock market efficiency
- Forward and futures contracts, option pricing
- Investment decisions and the significance of real options
- Capital structure and dividend decisions
- Capital restructuring: Initial Public Offering
This course is delivered as a mixture of lectures, classes and readings. Through its rigorous approach, students will gain a solid foundation and knowledge of financial securities and corporate finance, and its practical application based on empirical evidence.
This course is assessed through two examinations: a mid-session examination (50%) and a final examination (50%). Homework is submitted during the course and feedback is provided to aid with exam preparation.
Further details will be provided at the beginning of the course.
- Apply financial securities and corporate finance theory to real-world cases
- Identify modern valuation methods for fixed income, stocks and derivatives
- Understand the value of different capital structures
- Analyse how to spend funds on alternative investment projects
- Describe the alternative techniques commonly employed to assess investment opportunities
This intensive course is ideal if you are looking to develop a greater understanding of asset markets and corporate finance. This course is suitable for you if you wish to enter the financial services industry or move into strategic management positions within a firm.
LSE’s Department of Finance ranks among the most prestigious in the world. The Department, along with the Departments of Accounting and Management, was ranked as the UK leader for Business and Management Studies in the most recent Research Excellence Framework.
Students have privileged access to renowned LSE faculty, global thought-leaders and some of the foremost researchers in their field. The Department is devoted to excellence in teaching and research on subjects including corporate finance, asset pricing theory, risk management, empirical analysis of capital markets, behavioural finance, portfolio analysis, derivatives pricing, microstructure and financial econometrics. From foundation level to advanced courses, students build real-world skills and gain exposure to critical issues, questions and state-of-the-art thinking on the most relevant topics.
Dr Dong Lou (Session One)
Associate Professor of Finance, Department of Finance
Dr Georgy Chabakauri (Session One)
Associate Professor of Finance, Department of Finance
Dr Ashwini Agrawal (Session Three)
Assistant Professor of Finance, Department of Finance
Dr Thummim Cho (Session Three)
Assistant Professor, Department of Finance
R. Brealey, S. Myers & F. Allen, Principles of Corporate Finance, 13th edition, McGraw-Hill (2019)
J. Berk and P. De Marzo, Corporate Finance, Pearson International Edition (2007)
*A more detailed reading list will be supplied prior to the start of the programme
**Course content, faculty and dates may be subject to change without prior notice