Undergraduate Course: Economic analysis of corporate finance law (LAWS10153)
|School||School of Law
||College||College of Humanities and Social Science
|Credit level (Normal year taken)||SCQF Level 10 (Year 3 Undergraduate)
||Availability||Available to all students
|Summary||This course aims to examine fundamental concepts and theories concerning corporate financing and investing decisions. It is an in-depth study of some aspects of corporate law and corporate finance. Some seminars have a strong theoretical focus and engage in detail with various theories explaining the interactions between various corporate constituencies. At the same time, the course as a whole has very significant practical relevance.
The course is structured in two parts. The first part (seminars 1-5) covers the economic structure of corporate law and governance, with a focus on legal rules governing financing, investment and dividend decisions. The second part (seminars 6-10) is an analysis of legal and economic issues arising out of the relationship of the corporation with capital markets through IPOs, stock exchange listings, and other forms of raising finance through equity and debt markets.
Topics covered include:
- Fundamental concepts of corporation law and economics
- The contractarian theory of the firm;
- Limited liability and shareholders' voting rights
- Dividend policy and agency costs
- Directors' fiduciary duties and the business judgement rule
- Introduction to the economic theories underpinning capital markets
- The market for corporate control
- Nature and organization of securities and derivatives markets
- Issuer disclosure, market transparency, and the cost of capital
- Legal and economic analysis of market abuse
The course will be taught in 10 two-hour seminars. Each seminar will be a combination of teacher-led and student-led activities. The student-led activities include group discussions. Students will be divided in groups of three students and asked to discuss a topic among group members, followed by a class discussion of group findings.
Information for Visiting Students
|High Demand Course?
Course Delivery Information
|Academic year 2018/19, Available to all students (SV1)
|Learning and Teaching activities (Further Info)
Seminar/Tutorial Hours 20,
Programme Level Learning and Teaching Hours 4,
Directed Learning and Independent Learning Hours
|Assessment (Further Info)
|Additional Information (Assessment)
||1. 75% take home essay
The essay length is 4,000 words excluding cover page, footnotes and bibliography. The dates of the essay titles release and essay submission will be announced in the course guide.
2. 25% assessed element
This component of assessment may consist of a presentation in class, a blog entry, a critical review or a poster presentation, as selected by the course organisers. The assessment technique selected will be indicated in the course guide, together with detailed guidelines and assessment criteria
||The formative assessment consists of a critical analysis of one of the mandatory readings for week 3 or week 9. The handouts for week 3 and 9 will be distributed one week in advance, with the mandatory reading that could be selected for formative assessment clearly indicated.
Students are expected to summarise the prescribed reading very briefly and to comment on article's strengths and weaknesses and on its significance in the context of the themes covered in the course up to that point. Participating in the formative assessment is optional.
Collective feedback on submissions will be given in class, in week 3 or 9, and will be posted on the course website. Individual feedback will be sent to each student via email within two weeks from the submission date.
|No Exam Information
On completion of this course, the student will be able to:
- Demonstrate a critical understanding of the main economic theories of the corporation and their implications on corporate finance.
- Compare and contrast the legal and economic approaches to fiduciary duties and the business judgement rule.
- Analyse the main economic functions of capital markets and of capital market instruments.
- Demonstrate a critical understanding of the main economic theories relating to the operation of capital markets and prohibition of market abuse.
- Be able to analyse critically primary and secondary source materials and use them to present a logical and well-structured oral or written argument.
|The following titles offer background information on company law:|
Reiner Kraakman et al., The Anatomy of Corporate Law, 2nd ed. (New York: Oxford University Press, 2009), chapters 3-6
John Lowry and Arad Reisenberg, Pettet's Company Law: Company Law and Corporate Finance, 4th ed. (Essex: Pearson, 2012), chapters 7 - 11
Specific materials and resources for each class will be indicated in the course handouts which will be made available on a weekly basis in advance of each class.
|Graduate Attributes and Skills
||By the end of the course the students will:
1) develop their ability to work independently under fixed deadlines, seeking relevant advice and support when necessary
2) develop their ability to work constructively as a member of a group or team, assert leadership or follow instructions
3) participate effectively in seminars, workshops and discussions
4) develop their capacity of reflecting on the outcomes of individual research efforts with a view to identifying strengths and weaknesses and furthering their own learning
|Keywords||Theory of the Firm; Shareholder Primacy; Stakeholders; Fiduciary Duties; Market for Coporate Control
|Course organiser||Dr Remus Valsan
Tel: (0131 6)50 2008
|Course secretary||Ms Olivia Hayes
Tel: (0131 6)50 9588