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Course 2010-2011 a.y.

6143 - FINANCIAL CONTRACTING


CLEAM - CLES - CLEF - BIEM - CLEACC
Department of Finance

Course taught in English


Go to class group/s: 31

CLEAM (6 credits - II sem. - OP  |  SECS-P/09) - CLES (6 credits - II sem. - OP  |  SECS-P/09) - CLEF (6 credits - II sem. - OP  |  SECS-P/09) - BIEM (6 credits - II sem. - OP  |  SECS-P/09) - CLEACC (6 credits - II sem. - OP  |  SECS-P/09)
Course Director:
FAUSTO PANUNZI

Classes: 31 (II sem.)
Instructors:
Class 31: FAUSTO PANUNZI


Course Objectives

The aim of this course is to show how financing decisions are affected by moral hazard and asymmetric information and how different securities can (or cannot) mitigate the associated agency costs. The course discusses the theoretical literature on financial contracting. Calculus are used in the course. 

 


Course Content Summary
  • Capital structure in a perfect market: the Modigliani-Miller propositions 
  •  Modigliani-Miller with taxes 
  •  Early theories: Debt overhang and Pecking Order
  •  Dividends as a signaling device 
  •  Financing capacity with moral hazard 
  •  Boosting the ability to borrow: diversification and collateral
  •  Boosting the ability to borrow: group lending and microfinance 
  •  Debt and incentives: Risk shifting and Free cash flow
  •  Corporate finance under asymmetric information 
  •  Control rights 
  •  Takeovers and One Share One Vote
  •  Law and finance
  •  Politics and Finance 

Detailed Description of Assessment Methods

Attending the course is strongly recommended.  Four problem sets will be distributed and solved in class. They will not be graded and they have no weight on the final grade. There will be a midterm and a final exam (both written exams). Calculus will be used in the course. 


Textbooks

Lecture notes + review articles. No textbook

Exam textbooks & Online Articles (check availability at the Library)

Prerequisites

Microeconomics, Corporate Finance

Last change 01/04/2010 18:30
 

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