Universität Wien

040094 KU Corporate Finance 1 (MA) (2024W)

4.00 ECTS (2.00 SWS), SPL 4 - Wirtschaftswissenschaften
Prüfungsimmanente Lehrveranstaltung
Moodle
Mi 27.11. 15:00-18:15 Hörsaal 12 Oskar-Morgenstern-Platz 1 2.Stock

An/Abmeldung

Hinweis: Ihr Anmeldezeitpunkt innerhalb der Frist hat keine Auswirkungen auf die Platzvergabe (kein "first come, first served").

Details

max. 50 Teilnehmer*innen
Sprache: Englisch

Lehrende

Termine (iCal) - nächster Termin ist mit N markiert

MIDTERM EXAM: November, 8, 3.00 pm -04.30 pm, OMP1, HS 4
FINAL EXAM: December, 9, 04.45 pm - 06.15 pm, OMP1, HS 5, HS 8

  • Mittwoch 16.10. 15:00 - 18:15 Hörsaal 7 Oskar-Morgenstern-Platz 1 1.Stock
  • Mittwoch 23.10. 15:00 - 18:15 Hörsaal 7 Oskar-Morgenstern-Platz 1 1.Stock
  • Mittwoch 30.10. 15:00 - 18:15 Hörsaal 12 Oskar-Morgenstern-Platz 1 2.Stock
  • Mittwoch 06.11. 15:00 - 18:15 Hörsaal 12 Oskar-Morgenstern-Platz 1 2.Stock
  • Freitag 08.11. 15:00 - 16:30 Hörsaal 4 Oskar-Morgenstern-Platz 1 Erdgeschoß
  • Mittwoch 13.11. 15:00 - 18:15 Hörsaal 12 Oskar-Morgenstern-Platz 1 2.Stock
  • Mittwoch 20.11. 15:00 - 18:15 Hörsaal 12 Oskar-Morgenstern-Platz 1 2.Stock
  • Montag 09.12. 16:45 - 18:15 Hörsaal 5 Oskar-Morgenstern-Platz 1 Erdgeschoß
    Hörsaal 8 Oskar-Morgenstern-Platz 1 1.Stock

Information

Ziele, Inhalte und Methode der Lehrveranstaltung

The Corporate Finance I course is an introductory course that forms the first part of a two-course sequence covering topics in Corporate Finance. The aim of the course is to provide a broad conceptual and practical platform for analysing issues in Corporate Finance.
The objective is to develop a framework to think about financial decisions firms regularly un-dertake. We will go back and forth between developing theories and confronting them with spe-cific real-life examples. We start by analysing the firm’s financing decision in perfect markets. We outline the role of taxes in financing and project valuation. Incorporating the notion of fi-nancial distress and bankruptcy, we draw on the Static Trade-off Theory of Capital Structure. We analyse the role of information in shaping the financing of corporations and discuss the re-sulting pecking order of financing. We then focus on the potential conflicts of interest between shareholders and debt holders and between shareholders and management, and their implica-tions for the firm’s capital structure decision. We conclude this part by discussing dynamic con-siderations the firm might have to make when setting its capital structure.
The second topic of the course will focus on the firm’s payout policy, i.e. we will look at the question of when and how the firm is able to distribute excess cash to shareholders. We show that, as with capital structure, a firm can create value by its payout policy only in the presence of market imperfections such as taxes, agency costs, transaction costs or asymmetric infor-mation between management and investors. We also discuss cash management by corporations and the usefulness of credit lines for them.
Finally, we will analyse corporate restructurings such as mergers and acquisitions (M&As).

Upon completing this course, students should be able to:
• Discuss the financing decisions of corporations.
• Understand the importance of asymmetric information and signalling in capital markets and financial decisions.
• Critically discuss the question of the dividend policy a firm should follow.
• Understand the feasibility and trade-offs employed in the different forms of restructuring for financially distressed firms.
• Explore different methods of issuing securities and understand the stock price reaction to issuing securities.

The course “Corporate Finance I” consists of 7 sessions. Sessions consist of lectures, ex-ercise-solving, as well as one guest lecture, and may involve discussion.
Case Studies
The case method is one of the most effective pedagogical tools to sharpen your analyti-cal and decision-making skills, as it requires you to be an active participant in financial decisions. The discussion constitutes an opportunity to defend your position and to learn from others, by listening to their comments and criticism. Classrooms are our training environments to prepare you for business challenges.
You are encouraged to meet in groups to discuss and analyse the cases. In the past, stu-dents have found that these groups complement the class discussion well.
The case study will be provided by KPMG.

Course Content
PART I: CAPITAL STRUCTURE
Session 1-2:
Irrelevance of capital structure in perfect capital markets
Impact of taxes on capital structure
Capital structure and financial distress
Session 3:
Capital structure and asymmetric Information (Signalling)
Session 4:
Conflicts of interest between shareholders and debt holders
Conflicts of interest between shareholders and managers
Midterm Exam
PART II: PAYOUT POLICY
Session 5: Payout policy in perfect capital markets
Impact of taxes on payout policy
Dividends and transaction costs
Dividends and asymmetric information
PART III: CORPORATE RESTRUCTURING
Session 6:
The economics of M&A
Reasons to acquire
Market reaction to M&A
Final Exam

Art der Leistungskontrolle und erlaubte Hilfsmittel

Attendance is compulsory. This also applies to the guest lecture. Missing more than one class without a medical certificate results in not receiving credit for the class.
The evaluation will be based on the following items:
40 % Mid-term Exam
40 % Final Exam
20% Quizzes and class participation
Use of AI or any other auxiliary means are not allowed in the exams.

Mindestanforderungen und Beurteilungsmaßstab

Attendance is compulsory.

Prüfungsstoff

All lecture materials and paper presentations.

Literatur

The main reading material for the course is contained in:
• “Corporate Finance”, 4th Edition by P.DeMarzo and J.Berk, Pearson Global Edition. (2013).
• “The New Corporate Finance. Where Theory Meets Practice”, 3rd Edition by D.Chew, McGraw-Hill Irwin (CHEW).
Supplementary Readings by Topic:
I: Capital Structure Theories and Payout (Parts I-II)
• Chew, D. (2001), ‘The Modigliani-Miller Propositions after Thirty Years’ Jour-nal of Applied Corporate Finance, Vol. 6.Num.1
• Graham, J. & Harvey, C. (2002), “How do CFOs make capital budgeting and capital structure decisions?” Journal of Applied Corporate Finance, 15(1): pp.8-23
• Opler, T.C., Saron, M. & Titman, S. (1997), “Designing capital structure to cre-ate shareholder value.” Journal of Applied Corporate Finance, 10(1): pp.21-34
• Smith, C.W. (1986), “Raising capital: theory and evidence.” Midland Corporate Finance Journal, 4: pp.6-22
• Barclay, M.J. & Smith, C.W. (1996), “On financial architecture: leverage, ma-turity, and priority.” In: Chew, D.H. (eds.) (2001) New corporate finance: where theory meets practice. 3rd ed. Boston, Mass.: Irwin McGraw-Hill, pp.210-223
• Ghosh, C. & Woolridge, J.R. (1988), “An analysis of shareholder reaction to dividend cuts and omissions.” Journal of Financial Research, 11(4): pp.281-294
II. Selected Topics – Financial Distress and Restructuring
• Franks, Nyborg and Torous, “A Comparison of US, UK and German Insolvency Codes,” Financial Management, Volume 25, No 3.
• Stuart C. Gilson (1991), “Managing Default: Some Evidence on How Firms Choose Between Workouts and Chapter 11”, Journal of Applied Corporate Fi-nance Volume 4, Issue 2.
• Lawrence A. Weiss (1991), “The Bankruptcy Code and Violations of Absolute Priority”, Journal of Applied Corporate Finance, Volume 4, Issue 2.

Zuordnung im Vorlesungsverzeichnis

Letzte Änderung: Do 03.10.2024 16:45