Postgraduate Course: Practice of Corporate Finance and the Law (LAWS11321)
|School||School of Law
||College||College of Arts, Humanities and Social Sciences
|Credit level (Normal year taken)||SCQF Level 11 (Postgraduate)
||Availability||Not available to visiting students
|Summary||Modern corporations draw funding to finance their consumption and investment needs from a variety of sources on the basis of extensive cost-benefit considerations. These include a multitude of factors, such as legal considerations, the quantity of funding required and cost of capital depending on its source, impact on shareholders and management etc. Students in this course will discuss the mechanics, structuring, and legal aspects of select corporate finance transactions and their interaction with organised capital markets (e.g., stock exchanges, fixed income markets) or private capital markets (e.g., private equity, venture capital, and other high risk/high yield capital).
To this effect, the course will also examine select topics in capital markets and economic theories underpinning them, including modern finance theory, with special focus on the capital structure irrelevance theorem and risk management techniques, including corporate valuations. It also expands on the law and economics of disclosure, regulation of market abuse (insider dealing and market manipulation), and the function and regulation of the market for corporate control.
Then the course focuses on the mechanics, structuring corporate takeovers, IPOs, Private Equity Markets and the legal and regulatory framework underpinning them. In building the theoretical and knowledge framework the course teachers will encourage students to study and research, under supervision, specific high profile cases and present their case studies in class
This course will cover the following topics:
1. Economic terms and finance theory
2. The essential functions of capital markets and main corporate finance instruments
3. Equity financing: The Law and Practice of Initial Public offers and Rights Issues
4. The Law and Practice of Debt financing
5. Balance Sheet Analysis and Financial Accounting Semester 2
6. The Mechanics of Market Abuse
7. The Law of Insider Dealing and Market Manipulation
8. Economics of Corporate Takeovers: The Market for Corporate Control
9. The Law and Practice of Corporate Takeovers
10. Private Equity transactions and The Changing face of shareholders (Asset Managers, Exchange Traded funds etc)
Entry Requirements (not applicable to Visiting Students)
||Other requirements|| Having a background in corporate law, finance, regulation, regulatory practice, central banking or Law and Economics would be a distinct advantage.
Course Delivery Information
|Academic year 2020/21, Not available to visiting students (SS1)
|Learning and Teaching activities (Further Info)
Seminar/Tutorial Hours 40,
Programme Level Learning and Teaching Hours 8,
Directed Learning and Independent Learning Hours
|Assessment (Further Info)
|Additional Information (Assessment)
One essay (40%) 4,000 words, submitted at the end of Semester 1
One essay (60%) 6,000 words, submitted at end of Semester 2
||All students will be invited to present in class on a topic of their choice in the course of the semester. Before the presentation students submit, on an individual basis, a written summary of their presentation of no more than 800-1,000 words (or 4,000 words on a group basis) on which they are given one-on-one and written feedback.
In addition, the last two seminars of semester 2 are dedicated on group presentation on real life case studies, normally one on a complex cross-border takeover transaction and one on a complex Private Equity deal for which they submit a host of legal documents and are offered one on one or group-based feedback.
The class is divided in two groups, each of which deals with one case study. Each group is divided in sub-groups which comprise both students with law and/or accounting and finance background. Tasks are distributed to different group members according to preference or agreed group work-sharing arrangements.
The student members of each group are required to carry their tasks in a most professional manner under course leader instructions and present the case and their findings to their client in an attempt to win the client¿s mandate.
This way students learn how to overhaul their team-work and interview skills as well as how to work with team members from diverse study backgrounds in mixed law and finance teams and learn how to engage in interdisciplinary research, dialogue, and team-work.
Finally, the course organiser strongly suggests the formation from the beginning of term of mixed background study groups whose value in adding student understanding of the key concepts of this predominantly interdisciplinary course may not be underestimated.
|No Exam Information
On completion of this course, the student will be able to:
- Be able to show an in depth understanding of capital markets, corporate finance theory, and of corporate finance transactions, with special reference to the entities involved in each transaction, the objectives of the transaction, and legal infrastructure (network of contracts, case and statutory law) underpinning each of the examined transactions.
- Be able to analyse the problems (barriers/risks) addressed in corporate finance transactions and the tools the law and market practice provide to address or mitigate these problems.
- Be familiar with the tools used to structure and draft corporate finance deals.
- Be able to handle the structuring and legal analysis of aspects of corporate finance transactions without supervision
|H. Kent Baker and Gerald S. Martin, eds., Capital Structure and Corporate Financing Decisions: Theory, Evidence, and Practice (Hoboken, N.J.: John Wiley & Sons, 2011), also available electronically |
R. Veil, European Capital Markets Law (Hart Publishing, 2013)
L Gullifer and Jennifer Payne, Corporate Finance Law: Principles and Policy (Hart Publishing, 2nd edition, 2014)
P. Davies, Introduction to Company Law (Clarendon Law Series, OUP, second edition, 2010), chs 1-4
Emilios Avgouleas, The Mechanics and Regulation of Market Abuse ¿ A Legal and Economic Analysis (Oxford University Press, 2005), Chapters 1-5.
Emilios Avgouleas, ¿A New Framework for the Global Regulation of Short Sales: Why Prohibition is Inefficient and Disclosure Insufficient¿ Stanford Journal of Law, Business, and Finance, Vol. 16, No. 2, 2010 available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1411615
Emilios Avgouleas, What Future for Disclosure as a Regulatory Technique? Lessons from the Global Financial Crisis and Beyond¿, available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1369004
Emilios Avgouleas, ¿The Global Financial Crisis and the Disclosure Paradigm in European Financial Regulation: The Case for Reform¿ European Company and Financial Law Review, Vol. 6, No. 4, 2009
|Graduate Attributes and Skills
||(i) researching both primary and secondary sources for the purposes of preparation for seminars, and for assessable written work.
(ii) oral and written communication skills.
(iii) analysing legal and economic issues pertinent to structuring, and drafting the most common forms of corporate finance transactions as well as providing advice on them.
(iv) improving information technology and communication skills through accessing the internet for the purposes of (i) above and in general overhauling team-work skills.
|Keywords||Corporate finance,corporate law,modern finance theory,securities reguation,law and finance
|Course organiser||Dr Longjie Lu
Tel: (0131 6)50 2336
|Course secretary||Miss Lauren Ayre
Tel: (0131 6)50 2002