Course Description
Theoretical constructs underlying corporate finance, illustrated with both theoretical seminal and current research. Theoretical topics will include optimization, non-cooperative game theory, information economics, and agency theory. Signaling, screening, incentive design, product market structure, research and development, security issuance, bankruptcy, and market microstructure.
Athena Title
CORP FINANCE THEORY
Prerequisite
Permission of department
Semester Course Offered
Offered every year.
Grading System
A - F (Traditional)
Course Objectives
The objective of this course is to familiarize you with the main paradigms in financial economics. This course is primarily meant for Ph.D. students (current or intending)in Finance. Economics, Accounting and Operations Research Ph.D. students may also find this material is somewhat relevant and useful. You should be able to understand optimization and calculus and be able to solve an optimization problem easily.
Topical Outline
1. Utility theory, risk aversion, stochastic dominance 2. The portfolio problem, CAPM and APT 3. Conditions for aggregation of utility 4. Game theory 5. Adverse selection and signaling 6. Principal agent problems and moral hazard 7. Theory of the firm
Syllabus