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1105974 |
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Course |
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| Advanced Corporate Finance - Fall 2020 | |||||||||||||||||||||
Faculty |
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Course Coordinator |
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| Associate Professor Ramona Westermann | |||||||||||||||||||||
Prerequisites |
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| Participants are assumed to have a broad knowledge of basic Corporate Finance corresponding to a textbook such as Corporate Finance (Berk and de Marzo). Furthermore, participants should have some familiarity with derivatives, portfolio theory, basic statistics and probability theory, and optimization problems. | |||||||||||||||||||||
Aim |
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To provide participants with a firm, rigorous and state-of-the-art knowledge and understanding of corporate finance theory and empirics. The course covers fundamental concepts, relations, and models, and it also outlines most recent developments. Both static and dynamic models are discussed, as well as topics in empirical corporate finance. The course also discusses research dissemination including various types of presentations and the publication process. |
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Course content |
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Course topics include capital structure, corporate liquidity management and payout policy, corporate investment decisions, and agency conflicts and executive compensation. In addition, the course discusses recent developments in corporate finance, including asset pricing implications of corporate finance theories as well as corporate finance and the macro economy.
Please also see the lecture plan. |
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Teaching style |
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44 lectures and exercises. The lectures will mainly be based on research papers. In some cases, it may be convenient to consult a textbook such as Berk and deMarzo (2019). The exercises contain the following elements: • Two major problem sets (individual assignments) to hand in: – Problem set 1: Solving, programming, and analyzing a model previously discussed in the lecture, but with a minor extension – Problem set 2: Referee report on an assigned paper • Additional problem sets to be solved before the exercise session. Solutions are presented and discussed by students. • Student presentations of core papers. Allow 30 minutes plus questions and discussion. Each student has to present twice. Students have to pass the written assignments and the presentations before they are allowed to take the final exam. |
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Lecture plan |
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Tentative content and schedule:
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Learning objectives |
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| The students should demonstrate a solid knowledge of the key concepts, methods, theories, and empirical evidence in classical and contemporary corporate finance research. They should be able to understand and assess new corporate finance research papers and position such papers in the general corporate finance literature. | |||||||||||||||||||||
Exam |
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| The course ends with a final oral exam. The student draws a paper from the curriculum. The student then has 20 minutes to prepare an oral presentation of the paper. The examination lasts 20 minutes including the time the examiner needs to determine the grade and communicate it to the student. The examination begins with the student giving the prepared presentation for about 5-7 minutes, possibly interrupted by questions by the examiner. The examination proceeds with further questions, which may be related or unrelated to the paper drawn. | |||||||||||||||||||||
Other |
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Start date |
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| 01/09/2020 | |||||||||||||||||||||
End date |
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| 17/11/2020 | |||||||||||||||||||||
Level |
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| PhD | |||||||||||||||||||||
ECTS |
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| 7.5 | |||||||||||||||||||||
Language |
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| English | |||||||||||||||||||||
Course Literature |
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Course literature - tentative Admati, A. R., P. M. deMarzo, M. F. Hellwig, and P. Pfleiderer (2018): “The leverage ratchet ef-fect,” Journal of Finance, 73, 145–198. Allen, F., A. E. Bernardo, and I. Welch (2000): “A theory of dividends based on tax clienteles,” Journal of Finance, 55, 2499–2536. Baker, M. and J. Wurgler (2004): “A catering theory of dividends,” Journal of Finance, 59, 1125–1165. Bernstein, S. (2015): “Does going public affect innovation?” Journal of Finance, 70, 1365–1403. Carlson, M. D., A. J. Fisher, and R. Giammarino (2004): “Corporate investment and asset price dy-namics: Implications for the cross-section of returns,” Journal of Finance, 59, 2577–2603. DeMarzo, P. M. and Y. Sannikov (2006): “Optimal security design and dynamic capital structure in a continuous-time agency model,” Journal of Finance, 61, 2681–2724. Gornall, W. and I. S. Strebulaev (2018): “Financing as a supply chain: The capital structure of banks and borrowers,” Journal of Financial Economics, 129, 510–530. Graham, J. R. (2000): “How big are the tax benefits of debt?” Journal of Finance, 55, 1901–1955. Graham, J. R. and M. Leary (2018): “The evolution of corporate cash,” Review of Financial Studies, 31, 4288–4344. Grenadier, S. R. (2002): “Option exercise games: An application to the equilibrium investment strat-egies of firms,” Review of Financial Studies, 15, 691–721. Grosse-Rueschkamp, B., S. Steffen, and D. Streitz (2019): “A capital structure channel of monetary policy,” Journal of Financial Economics, 133, 357–378. Gryglewicz, S. (2011): “A theory of corporate financial decisions with liquidity and solvency con-cerns,” Journal of Financial Economics, 99, 365–384. Halling, M., J. Yu, and J. Zechner (2016): “Leverage dynamics over the business cycle,” Journal of Financial Economics, 122, 21–41. John, T. A. and K. John (1993): “Top-management compensation and capital structure,” Journal of Finance, 48, 949–974. Krüger, P., A. Landier, and D. Thesmar (2015): “The WACC fallacy: The real effects of using a unique discount rate,” Journal of Finance, 90, 1253–1285. Leary, M. T. and R. Michaely (2011): “Determinants of dividend smoothing: Empirical evidence,” Review of Financial Studies, 24, 3197–3249. Lin, T.-C., Q. Liu, and B. Sun (2019): “Contractual managerial incentives with stock price,” Ameri-can Economic Review, 109, 2446–2468. Opler, T., L. Pinkowitz, R. M. Stulz, and R. Williamson (1999): “The determinants and implications of corporate cash holdings,” Journal of Financial Economics, 52, 3–46. Ross, S. A. (1977): “The determination of financial structure: The incentive-signalling approach,” Bell Journal of Economics, 8, 23–40. Schepens, G. (2016): “Taxes and bank capital structure,” Journal of Financial Eco- nomics, 120, 585–600. Strebulaev, I. A. (2007): “Do tests of capital structure theory mean what they say?” Journal of Fi-nance, 62, 1747–1787. Stulz, R. M. (1990): “Managerial discretion and optimal financing policies,” Journal of Financial Economics, 26, 3–27. van Binsbergen, J. H. and C. C. Opp (2019): “Real anomalies,” Journal of Finance, 74, 1659–1706. Yermack, D. (2006): “Flights of fancy: Corporate jets, CEO perquisites, and inferior shareholder returns,” Journal of Financial Economics, 80, 211–242. |
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Fee |
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| DKK 9,750 | |||||||||||||||||||||
Minimum number of participants |
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| 5 | |||||||||||||||||||||
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Maximum number of participants |
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| 12 | |||||||||||||||||||||
Location |
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1 September - 17 November 2020
Weeks 36, 37, 38, 39, 40, 42
Copenhagen Business SchoolTuesdays from 9 - 13 Weeks 41, 44, 45, 46, 47 Tuesdays from 12:30-16:30 Solbjerg Plads 3 - room SP D4.20 2000 Frederiksberg |
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Contact information |
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PhD Support Bente S. Ramovic bsr.research@cbs.dk tel: +45 3815 3138 |
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Registration deadline |
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| 15/07/2020 | |||||||||||||||||||||
| Please notice that registration is binding after the registration deadline. | |||||||||||||||||||||