The purpose of this course is to provide basic financial literacy to students with an interest in corporate law, but also in other fields of law where financial/economic thinking plays a role. The course covers fundamentals of financial markets; interpretation of financial statements; theoretical concepts such as risk and return; modern developments such as derivative securities and hedge funds; and legal applications, including valuation of intellectual property, damages in securities fraud, prejudgment interest, and mergers & acquisitions. The course requires simple numerical calculations (nothing beyond addition, subtraction, multiplication, division), but the emphasis is on gaining an understanding of elementary finance and its application to legal and regulatory problems.
The course fuses three distinct innovations in the practice and scholarship of corporate law. The first innovation is the recognition that finance theory is centrally important to a thorough understanding of issues in corporate law. Business lawyers need to understand the business realities of the transactions that they work on. To talk to your clients; to read their documents; to draft contracts and disclosure documents for them; to counsel them on issues that mix business sense with legal constraints; you need some knowledge of finance.
