B400 Advanced Corporate Finance I Capital Structure
Lecturer: | Prof. Dr. Christian Koziol |
Language: | English |
Recommended for: | 1st year M.Sc
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Course type and number of hours: | 2 hours lecture + 2 hours exercise session |
ECTS credits: | 9 ECTS |
Type of exam: | written exam |
Time and place: | Lecture: Monday, 4:15 PM – 5:45 PM, Kupferbau HS 24 Exercise sessions:Monday, 2:15 PM – 3:45 PM, Kupferbau HS 24
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Goals
This course focuses on the fundamental question of corporate finance "what is the optimal capital structure of a firm?". The aim of the course is to introduce the students to the major practical and theoretical factors that drive the optimal capital structure and to provide an advanced model framework with that the classical solutions for the corporate financing problems are derived.
Content:
- Introduction to financing decisions
- A structural firm value model (Merton, 1974)
- Tradeoff theory (Leland, 1994)
- Problems between claim holders
- Problems from asymmetric information
- Further aspects of capital structure
Literature:
- Grinblatt, Mark and Sheridan Titman (2002): Financial Markets and Corporate Strategy, 2nd ed., Boston, McGraw-Hill.
- Merton, Robert C. (1974): On the Pricing of Corporate Debt: The Risk Structure of Interest Rates, Journal of Finance 29, p. 449-470.
- Leland, Hayne E. (1994): Corporate Debt Value, Bond Covenants, and Optimal Capital Structure, Journal of Finance 49, p. 1213-1252.