LAWSG103 Corporate Finance
|LAWSG103: CORPORATE FINANCE|
|Credit value:||30 credits (15 ECTS, 300 learning hours)|
|Other Teachers:||Dan Prentice|
|Teaching Delivery:||20 x 2-hour weekly seminars, 10 seminars per term, Term One and Two|
|Who may enrol:||Any UCL Master’s student|
|Must not be taken with:||None|
|Qualifying module for:||LLM in Corporate Law;
LLM in International Banking and Finance Law
|Introductory video||Currently there is no introductory video for this module|
|Practice Assessment:||Opportunity for feedback on one optional practice essay|
|Final Assessment:||One 3-hour unseen written examination (100%)|
The module examines how companies finance their operations: by raising equity or debt capital, using forms of mezzanine financing, or relying on their retained earnings. We will approach the topic from both a finance and a legal perspective. We will discuss basic concepts of corporate valuation and theories of capital structure, including some of the cornerstones of finance theory, such as discounted cash flow and the capital asset pricing model. These concepts will inform our analysis of the legal framework governing the capital structure of companies. Our discussion will cover the nature of legal capital, minimum capital rules and the capital maintenance regime pursuant to the UK Companies Act 2006, including the regulation of distributions, capital reductions, share buy-backs and redeemable shares.
The second part of the module will concentrate on the issuance of debt and equity. We will again consider the legal framework against the backdrop of finance theory, notably questions of market efficiency and the challenge that behavioural finance poses to the efficient capital market hypothesis. We will consider both the corporate law requirements that apply when a company raises equity or debt capital and the extensive requirements of securities regulation that govern the public offering of equity and debt securities and their listing on regulated markets.
The module focuses on UK law, with references to relevant EU legislation and some other legal systems (particularly US law) where this is helpful to illustrate differences in approaches to regulation and shortcomings of particular regulatory solutions.
Background knowledge in finance is not required, but students should be willing to engage with the finance literature and familiarise themselves with key concepts of finance theory.
By the end of this module students should:
We will use the following two books as core textbooks for the module:
Module reading lists and other module materials will be provided via online module pages, once students have made their module selections upon enrolment. No single book takes the approach envisaged for this module. The convenor is happy to discuss reading if contacted by a student during the module.
No prior knowledge of finance or economics is required, nor is it necessary to have studied company law, though this will be helpful. Those with no knowledge of company law will need to do some additional background reading and it is advised to read:
For a non-technical introduction to finance and market efficiency (or the lack thereof), the following two books are excellent choices: