This course provides an introduction to the theory, the methods, and the concerns of corporate finance. Representative questions include: What is the Capital Asset Pricing Model, and how does it work? When do firms issue equity rather than relying on debt? How can debt help to overcome agency problems? Why do firms pay dividends? What is an IPO premium, and why does it exist? No prior background in economics or finance is required or expected.
Note that this course will not focus on the legal aspects of corporate finance. Nor will we cover the legal rules governing financial markets and institutions. Students interested in these issues may want to consider attending Professor Hu’s seminar “Corporate and International Finance and Governance,” which can be taken concurrently.