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Unit information: Advanced Corporate Finance in 2020/21

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Unit name Advanced Corporate Finance
Unit code ECONM2032
Credit points 15
Level of study M/7
Teaching block(s) Teaching Block 2 (weeks 13 - 24)
Unit director Dr. Ordonez-Calafi
Open unit status Not open
Pre-requisites

None

Co-requisites

None

School/department School of Accounting and Finance
Faculty Faculty of Social Sciences and Law

Description

This unit aims to build on students' prior knowledge of basic issues in corporate finance to treat some more advanced theoretical and empirical research in certain corporate finance topics. These topics will include models of firms' capital structure decisions based on agency problems and information asymmetry arguments, theory and empirical work surrounding Initial Public Offerings (IPOs), corporate governance mechanisms, and models of merger and takeover activity. The unit is designed to expose the students to the current academic research in the field. Emphasis is put on critical reading, interpretation of empirical tests in light of theories and understanding of econometric techniques in applied corporate finance research. Given its nature, the unit is suitable for students considering a career in practical corporate finance or further academic work in this area.

Intended learning outcomes

Having successfully completed this unit students should be able to:

  1. Describe the limitations of the simple Modigliani-Miller approach to corporate finance;
  2. Describe and set out models that demonstrate the importance of agency issues and asymmetric information in the determination of optimal corporate capital structure;
  3. Discuss the empirical work surrounding the performance of IPOs and SEOs and the theory developed to explain this evidence;
  4. Discuss different corporate governance mechanisms and their role in reducing agency conflicts;
  5. Provide a treatment of models aimed at explaining merger and takeover activity;
  6. Critically read and interpret current corporate finance research papers, discuss the underlying theories and assess the empirical methodology.

Teaching details

Teaching will be delivered through a combination of synchronous and asynchronous sessions including lectures, tutorials, drop-in sessions, discussion boards and other online learning opportunities

Assessment Details

This unit will be assessed by 100% exam

Reading and References

  • J. Berk and P. DeMarzo (2017), Corporate Finance, Fourth Global Edition, Pearson

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