Course Details in 2024/25 Session

Module Title	LM Economics of Corporate Finance
School	Birmingham Business School
Department	Economics
Module Code	07 40061
Module Lead	Paola Paiardini
Level	Masters Level
Credits	20
Semester	Semester 2
Pre-requisites
Co-requisites
Restrictions	None
Exclusions
Description	This module aims to provide students a solid economic foundation to the theory and practice of the recent developments in corporate finance. Students will analyse the economic mechanisms on how financial managers make decisions about what investments to make and how to finance them in the modern corporation and the resulting implications for resource allocation. The module will then examine firms' investment and financial decisions in the light of incentives and institutions and the role of informational asymmetries in the underlying interactions. Students will be equipped with appropriate tools of analysis to tackle issues and solve problems of corporate finance. The topics covered may include the structure of the firm, the models of credit rationing and determinants of the firm's borrowing capacity, corporate financing under asymmetric information and contract design, explore monitoring and design of securities, control rights and corporate governance.
Learning Outcomes	By the end of the module students should be able to: Critically evaluate the stylised facts of corporate finance in a modern world. Appraise the financial decisions financial managers make and how these decisions are made. Identify the various approaches used by firms to raise finance and evaluate the various sources of finance. Apply the financial principles for evaluating capital budgeting. Critically evaluate the extent to which agency issues, including ethics, sustainability and corporate governance affect corporate financing and investment decisions; thus, developing key leadership, teamworking and critical thinking skills.
Assessment
Assessment Methods & Exceptions	Assessment: (750 word) individual report (25%). (1000 word equivalent) 7 minute group visual presentation, using powerpoint and/or videos (25%). 1.5 hour exam (50%). Reassessment: Resubmission of failed component(s): (750 word equivalent) individual report (25%). (750 word equivalent) individual reflection on the group presentation task (25%). 1.5 hour exam (50%).
Other
Reading List