Equity Finance (BUST10155)
Normal Year Taken
Delivery Session Year
Visiting students must have at least 4 Business courses at grade B or above. This MUST INCLUDE at least one Finance course at intermediate level. This course cannot be taken alongside BUST08003 Principles of Finance. We will only consider University/College level courses.
The Equity Finance elective is designed to provide an overview of equity financing, with a clear focus on initial public offerings (IPOs). You will gain familiarity with the market for IPOs more generally and the IPO process in particular. Additionally, you will be introduced to seasoned equity offerings (SEOs). Relevant (empirical) research will be included aiming to help you develop a broad knowledge and understanding of issues relevant to the raising of equity capital.
You will familiarise yourself with the most important terms and issues surrounding equity financing. Through readings, you will learn about the processes and institutional setting of the primary market for equity financing, including the importance of the share allocation process in an IPO and the long-run performance of IPOs. Moreover, you will learn about SEOs and the short-term as well as long-term capital market reaction to this choice of financing. Readings will not only be based on standard books but will include a fair number of academic articles that elucidate contemporary issues relevant to equity financing. Deep understanding of these topics should equip you with a solid base of analytical and critical reasoning skills to help enable the pursuit of a wide array of careers including in investment banking, corporate finance and treasury management. Topics covered in this course include an introduction to the IPO market, sources of equity financing, the benefits and costs of going public, the mechanics of the going public process, the issue of IPO underpricing as well as the long-run performance of IPOs. Alternatives to the IPO process will be discussed, too. Additionally, SEOs will be analysed, their reasons and empirical evidence on their capital market perception. This course places a great emphasis on independent learning. Before each lecture, you will be provided with a list comprising 2-3 core readings and a number of additional readings. You are expected to read the core readings and ideally most if not all of the additional ones. The lectures will explore particular aspects of the readings and attempt to help you put materials in context. They are not a substitute for the readings. The nature of the material means that in many cases there may be no single acceptable answer. You are expected to learn how to argue a case that is supported by academic theory and empirical evidence.
Written Exam 70%, Coursework 30%, Practical Exam 0%
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