Economics of Corporate Finance

Module description

Summary:

This module aims to introduce you to recent developments in corporate finance. It presents the economics of information and discusses applications to corporate finance and corporate governance. It is intended that you will develop an appreciation of the application of financial economics to a range of problems and an understanding of its relevance in a variety of contexts. The module will equip you with appropriate tools of analysis to tackle issues and problems of corporate finance, and an ability to construct simplifying frameworks for studying the real world.

Additional Information: Internationalisation

The main focus of this module is on the theory of how companies finance themselves, which is applicable in an international environment.

Sustainability

All of the resources for this module are available on the ELE (Exeter Learning Environment).

Employability

In this module students acquire an understanding of how financial systems work and a theoretical perspective of managing teams, as well as improving their analytical and numerical skills.

Full module specification

Module title:Economics of Corporate Finance
Module code:BEEM117
Module level:M
Academic year:2016/7
Module lecturers:
  • Dr Simone Meraglia - Convenor
Module credit:15
ECTS value:

7.5

Pre-requisites:

None

Co-requisites:

BEEM100 or BEEM101

Duration of module: Duration (weeks) - term 2:

11

Module aims

To introduce students to recent developments in corporate finance. The module presents the economics of information and discusses its applications to corporate finance and corporate governance.

ILO: Module-specific skills

  • 1. an understanding of key concepts of moral hazard and adverse selection, their impact on firms and financial markets
  • 2. the choice between debt and equity financing
  • 3. how financial decisions are affected by asymmetric information
  • 4. applications to corporate governance and takeovers
  • 5. how firm financing decisions are affected in a global contest

ILO: Discipline-specific skills

  • 6. an understanding of the causes and consequences of moral hazard and adverse selection in financial markets

ILO: Personal and key skills

  • 7. an ability to think analytically about financial markets and firms
  • 8. formal modelling of decisions and financial markets
  • 9. an ability to study a range of teaching and research material and to work independently

Learning activities and teaching methods (given in hours of study time)

Scheduled Learning and Teaching ActivitiesGuided independent studyPlacement / study abroad
201300

Details of learning activities and teaching methods

CategoryHours of study timeDescription
Contact hours20Lectures

Formative assessment

Form of assessmentSize of the assessment (eg length / duration)ILOs assessedFeedback method
In-class Q&A15 minutes1-6Correct answers in-class

Summative assessment (% of credit)

CourseworkWritten examsPractical exams
01000

Details of summative assessment

Form of assessment% of creditSize of the assessment (eg length / duration)ILOs assessedFeedback method
Examination1002 hours1-9Written or verbal feedback
0
0
0
0
0
0
0

Details of re-assessment (where required by referral or deferral)

Original form of assessmentForm of re-assessmentILOs re-assessedTimescale for re-assessment
ExaminationExamination (100%) 2 hours1-9August re-assessment period

Syllabus plan

Part 1: Corporate Financing
• Modigliani-Miller
• Agency Costs of Financing
• Pecking Order Hypothesis

Part 2: Executive Compensation and Group Lending
• Moral Hazard
• Management Entrenchment
• Group Lending

Part 3: Takeovers
• Credit Rationing and Takeovers

Indicative learning resources - Basic reading

Basic reading:

Tirole, T. (2005)The Theory of Corporate Finance, Princeton: MIT Press

Constantinides G.M .(Editor), et al. Handbook of the Economics of Finance, North Holland Amsterdam

Module has an active ELE page?

Yes

Origin date

16/07/2014

Last revision date

15/08/2016