| Detailed information |
| Pre-requisites |
KS Introduction to Microeconomics AND IK Introduction to Microeconomics
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| Original study plan |
Bachelor's programme International Business Administration 2021W |
| Objectives |
The students have knowledge about the consequences of a firm’s financing decisions on incentives and opportunities in firms. They are able to understand the trade-offs associated with using standard financing tools and can analyze costs and benefits for firms, managers, and investors.
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| Subject |
This course discusses and formally analyzes basic concepts of the theoretical literature on corporate finance. We deal with questions such as
- how asymmetric information about an entrepreneur’s activities or investment opportunities affects a firm’s ability to raise outside financing,
- how the choice of debt versus equity financing affects managerial incentives, or
- how firms deal with liquidity shocks.
If time permits, we will cover more recent literature on the interaction of a firm’s financing structure with its relationships with non-financial stakeholders, such as employees or suppliers.
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| Criteria for evaluation |
Final exam, in-class participation
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| Methods |
We will mostly apply basic microeconomic and game theoretic tools.
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| Language |
English |
| Study material |
Lecture notes
Textbook: Tirole, Jean, 2006. “The Theory of Corporate Finance”, Princeton University Press.
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| Changing subject? |
No |
