Unit information: Advanced Corporate Finance in 2018/19

Unit name	Advanced Corporate Finance
Unit code	EFIM30020
Credit points	10
Level of study	H/6
Teaching block(s)	Teaching Block 2 (weeks 13 - 24)
Unit director	Professor. Ozkan
Open unit status	Not open
Pre-requisites	Corporate Finance (EFIM20006)
Co-requisites	Financial Markets (EFIM30019)
School/department	School of Accounting and Finance - Business School
Faculty	Faculty of Social Sciences and Law

Description including Unit Aims

This module covers advanced topics on corporate financing decision and how information asymmetry and conflicts of interests among various claimants influence corporate policies. Topics covered include optimal capital structure, financial distress, share repurchases, initial public offerings (IPOs), interaction of corporate strategy and financing, corporate governance, mergers and acquisitions, and real options.

Intended Learning Outcomes

On successful completion of this unit a student will be able to:

• understand how firms make decisions on their capital structure considering information asymmetry and conflicts of interests among various claimants.
• understand how firms decide whether they should do share repurchase or pay dividends.
• Understand which factors influence mergers and acquisitions decisions.
• Understand how corporate governance mechanisms can influence mergers and acquisitions.
• Understand which factors explain IPO underpricing.
• Understand how firms use real options in evaluating projects.

Teaching Information

10 hours of lectures; 5 hours of classes

This pattern of teaching may be changed slightly to accommodate the Easter Vacation.

Assessment Information

Formative: Students do group presentations and hand in their answers for tutorial sets.

Summative: 100% 1.5 hour exam

All learning objectives are assessed by both summative and formative assessment

Reading and References

Financial Markets and Corporate Strategy, European edition, David Hillier, Mark Grinblatt, Sheridan Titman, McGraw Hill Irwin.

Corporate Finance, European edition, David Hillier, Stephen A. Ross, Randolph W. Westerfield, Jeffrey Jaffe, Bradford Jordan, Mc Graw Hill Irwin.

Indicative Journal articles for tutorials:

1. “Managerial Entrenchment and Capital Structure Decisions”, P.G. Berger,E. Ofek, D.L. Yermack. Journal of Finance (1997).
2. “Macroeconomic conditions and capital raising”, Erel et al., Review of Financial Studies (2012).3) “Agency costs of free cash flow” Jensen, M., American Economic Review (1986).
3. “World markets for raising new capital” Weisbach et al., Journal of Financial Economics (2006)
4. “The theory and practice of corporate finance: evidence from the field”, Journal of Financial Economics (2001), J. Graham and C. Harvey.
5. “Corporate innovations and mergers and acquisitions”, Bena and Li, Journal of Finance (2014).
6. “The mystery of zero-leverage firms”, Ilya A.Strebulaev, BaozhongYang, Journal of Financial Economics (2013).