Corporate Finance Theory: Governance, Incentives and Valuation

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.