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Course 2017-2018 a.y.

30176 - FINANCIAL CONTRACTING


CLEAM - CLEF - CLEACC - CLES-BESS - WBB - BIEF - BIEM - BIG
Department of Finance

Course taught in English


Go to class group/s: 31

CLEAM (6 credits - II sem. - OP  |  SECS-P/09) - CLEF (6 credits - II sem. - OP  |  SECS-P/09) - CLEACC (6 credits - II sem. - OP  |  SECS-P/09) - CLES-BESS (6 credits - II sem. - OP  |  SECS-P/09) - WBB (6 credits - II sem. - OP  |  SECS-P/09) - BIEF (6 credits - II sem. - OP  |  SECS-P/09) - BIEM (6 credits - II sem. - OP  |  SECS-P/09) - BIG (6 credits - II sem. - OP  |  SECS-P/09)

Classes: 31 (II sem.)


Course Objectives
Show how financing decisions are affected by moral hazard and adverse selection, and how different securities can (or cannot) mitigate the associated agency costs. The course analyzes the theoretical literature on financial contracting.

Course Content Summary
Topic 1.
  • Capital structure in a perfect capital market: the Modigliani-Miller propositions. Material: slides and BD:14, BD:15.1-15.3.
Topic 2.
  • Debt Overhang and Risk Shifting. Material: slides.
Topic 3.
  • Law and Finance: taxation and monitoring. Material: slides.
Topic 4.
  • Law and Finance: bankruptcy law, control rights and renegotiation. Material: slides.
Topic 5.
  • Adverse selection and capital structure. Material: slides and T:6.1-6.3.
Topic 6.
  • Financing capacity with moral hazard. Material: slides and T:3.1-3.2.
Topic 7.
  • Boosting the ability to borrow: monitors, collateral and diversification. Material: slides and T:3.4-4.2
Topic 8.
  • Rethinking Intermediation: crowdfunding. Material: slides.

Detailed Description of Assessment Methods
Final written exams.

Textbooks
  • J. BERK, P. DEMARZO, Corporate Finance.
  • J. TIROLE, The Theory of Corporate Finance.
  • Slides and additional material are distributed through the e-learning website.

Prerequisites
Basic Optimization.
Last change 10/05/2017 14:47