Corporate Finance Theory: Governance, Incentives and Valuation

3 credits · Graduate

Course uses tools of contract theory (information economics, mechanism design, and game theory) to analyze key features of corporate structure, performance, and valuation. Investigates critical interactions among stakeholders in a modern business enterprise (directors, executives, management, labor, financiers, shareholders, and regulators) in achieving goals and objectives of the corporation. Topics include: reform of corporate governance and auditing; role of private equity, financial markets, and takeovers; efficient determination of leverage, dividends, liquidity, and risk management, and design of managerial incentive packages. Prerequisite: Economics 205D.