The course provides a broad overview of the extant corporate finance literature.

Topics and Readings

Topic I: Incomplete Contract

1. Theory in Incomplete Contract

Contract Theory, Bolton and Dewatripont:

ch11.Incomplete Contracts and Institution Design

ch12.Foundations of Contracting with Unverifiable Information

ch13.Markets and Contracts



2. Application of Incomplete Contract Theory in Corporate Finance

A. Venture capital industry

B. Banking industry

C: Law and Finance

i. Corporate Law

ii. Security Law

D. Political Alliances



II. Exit and Voice: Passive and Active Monitoring

The Theory of Corporate Finance:

ch8.Investor of Passage: Entry, Exit, and Speculation

ch9.Lending Relationships and Investor Activism



III. Security Design: The Control Right view

1. Multiple control right

The Theory of Corporate Finance:

ch10.Control Right and Corporate Governance

ch11.Takeovers



IV. Behavior Corporate Finance

1. Capital Structure and Financing



V: Security and Security Distribution