Introduction to the Theory of Corporate Finance

University of Mannheim, Fall 2008

Time: Tuesday, 15:30-17.00, bi-weekly, 09.09 – 09.12.

Place: L7, 3-5, Room 031

Lecture dates (preliminary!):

• 09 September 2008
• 23 September 2008
• 07 October 2008
• 21 October 2008
• 11 November 2008
• 25 November 2008
• 09 December 2008

Prerequisites: First two years of bachelor program or Vordiplom, a solid background in micro theory (at least at the Micro III level), and a basic understanding of econometrics.

Examination: 90-minute written English language exam.

Continuous work required! Not more than two absences!

No. of ECTS Credits: 2.5.

Course description: This is an introductory course on the financing decisions of private companies. The focus is on theory, but empirical aspects will be treated as well.

Contents

1) The Modigliani-Miller Theorem

2) Outside financing capacity and credit rationing (Tirole, Chapters 3 and 4), including empirical aspects

3) Liquidity and risk management (Tirole, Chapter 5)

4) Takeovers (Tirole, Chapter 11), including empirical aspects

The principal textbook is Jean Tirole, The Theory of Corporate Finance, Princeton University Press, 2006. Further reading will be assigned during the course.

Course homepage in the Mannheim DotLRN system