[ 514IFEKFOCK21 ] KS The Financing of Corporations

Workload Education level Study areas Responsible person Hours per week Coordinating university
3 ECTS B2 - Bachelor's programme 2. year Economics Matthias Fahn 2 hpw Johannes Kepler University Linz
Detailed information
Pre-requisites KS Introduction to Microeconomics AND IK Introduction to Microeconomics
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.
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.

Criteria for evaluation Final exam, in-class participation
Methods We will mostly apply basic microeconomic and game theoretic tools.
Language English
Study material Lecture notes Textbook: Tirole, Jean, 2006. “The Theory of Corporate Finance”, Princeton University Press.
Changing subject? No
On-site course
Maximum number of participants 100
Assignment procedure Assignment according to priority