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040273 KU Corporate Finance 2 (MA) (2016W)

4.00 ECTS (2.00 SWS), SPL 4 - Wirtschaftswissenschaften
Continuous assessment of course work

Registration/Deregistration

Details

max. 50 participants
Language: English

Lecturers

Classes (iCal) - next class is marked with N

Thursday 01.12. 09:00 - 13:00 Hörsaal 16 Oskar-Morgenstern-Platz 1 2.Stock
Tuesday 06.12. 09:00 - 13:00 Seminarraum 16 Oskar-Morgenstern-Platz 1 3.Stock
Monday 12.12. 13:15 - 16:30 Hörsaal 3 Oskar-Morgenstern-Platz 1 Erdgeschoß
Tuesday 10.01. 16:45 - 20:00 Hörsaal 10 Oskar-Morgenstern-Platz 1 2.Stock
Wednesday 11.01. 09:00 - 13:00 Hörsaal 16 Oskar-Morgenstern-Platz 1 2.Stock
Thursday 12.01. 09:00 - 13:00 Hörsaal 16 Oskar-Morgenstern-Platz 1 2.Stock
Wednesday 25.01. 09:00 - 13:00 Hörsaal 16 Oskar-Morgenstern-Platz 1 2.Stock
Thursday 26.01. 09:00 - 13:00 Hörsaal 16 Oskar-Morgenstern-Platz 1 2.Stock
Monday 30.01. 09:00 - 13:00 Hörsaal 15 Oskar-Morgenstern-Platz 1 2.Stock

Information

Aims, contents and method of the course

The second part of the course (Corporate Finance II) enables students to deepen their knowledge in the topics introduced in the first part of the course. We will cover seminal papers in the field and class participation will take the form of paper presentations. In addition, we cover selected topics in corporate restructuring, including restructuring of financially distressed firms or IPOs.
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.
-Appreciate the various channels of corporate governance and its impact on firm value and performance.

Selected Topics (relevant for Corporate Finance II)
Part IV: Financial Distress and Restructurings
Case Study: The Loewen Group, Inc.
Session 6-7: Private Restructurings, Bankruptcy
Part V: Initial Public Offerings (IPOs)
Session 8: Benefits and Costs of IPOs
Short-term Underpricing, IPO Cycles, Long-run
Underperformance
Part VI: The Role of Cash-Management
Session 9: Benefits and Costs of Holding Cash
The Role of Credit Lines
Part VII: Corporate Governance
Session 9: Corporate Governance in Firms
(Boards, Shareholders Voting Power)
Law and Finance
CASES:
(1) Thunderbird
Schneider S. A. and Square D Company
(CF I)
A-09-97-0017
(2) Harvard Business
School
The Loewen Group, Inc.
(CFII)
N. 9-201-082
(3) INSEAD
Infineon Technologies
N. 08/2014-5961
The course is held in English.

Assessment and permitted materials

The course Corporate Finance II is a mixture of lectures, case studies and student presentations. It consists of 7 3 hours sessions.
Case Studies. The case method is one of the most effective pedagogical tools to sharpen your analytical 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 criticisms. Classrooms are our training environments to prepare you for business challenges.
There will be 2 case preparations. Cases must be handed in on time. No credit will be given for late cases. You are encouraged to meet in groups to discuss and analyze the cases. In the past, students have found that these groups complement the class discussion well.
Regarding the cases, each group will submit a three-page memorandum of analysis and recommendations covering the case study questions plus any accompanying tables you 3
wish to include. Tables should be well organized and labeled. Be sure to indicate how you arrived at your conclusions. In addition, groups are required to prepare a power porint presentation, including the main points of the analysis.
What do I expect from you in class
This is an interactive course, where your active participation is required. Attendance is compulsory.
Laptop/tablets policy. You are not supposed to use your laptop/tablets during case discussions. You have to be 100% focused in the discussions. You may use your laptops/tablets on the lectures/discussion sessions ONLY for academic use emailing, facebooking, tweeting, chatting, skyping, internet surfing, etc. should NOT be done during classes. Doing these would penalize strongly your grade on class participation.
A learning area will be available in the Intranet (Moodle). There, you would find instructions for the sessions, communications, bibliography, etc. Please look at it a couple of times a week. Slides of the sessions will also be posted here, always BEFORE the class.

Minimum requirements and assessment criteria

25% Mid-term Exam
25% Case Study
50% Final Exam
Minimum requirement for a positive grade: at least 50% for each part.
A few papers will be distributed for presentations in CF II. Presentations carry a bonus of 10%. Notice that you do not need this to score 100% on the course.

Examination topics

Exam Material: All lecture materials and paper presentations.

Reading list

Packet of cases and readings (available through Moodle).
The main reading material for the course is contained in:
- Corporate Finance, 3th 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 new corporate finance
Where theory meets practice 3th ed.
McGraw-Hill Irwin
Ch 12: The Modigliani-Miller Propositions after Thirty Years
Journal 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 create 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
OR
In: Chew, D.H. (eds.) (2001) New corporate finance: where theory meets practice. 3rd ed. Boston, Mass.: Irwin McGraw-Hill, pp.277-293
Barclay, M.J. & Smith, C.W. (1996)
On financial architecture: leverage, maturity, 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 Finance 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.
Initial Public Offerings and Other Equity Issues
Chew, Chapter 18.
Ritter, J, Investment Banking and Securities Issuance, Chapter 5, Handbook of Economics of Finance, Edited by G.M. Constantinides, M.Harris, and R.Stulz
Corporate Governance
Cremers, M. and A. Ferrell (2010): Thirty Years of Shareholder Rights and Firm Valuation, Yale School of Management, Harvard Law School
Gompers, P. Ishii, J. and A. Metrick (2003): Corporate Governance and Equity Prices, The Quarterly Journal of Economics, Vol. 118, No.1.
Bebchuk, L. and Y. Grinstein. 2005. The Growth of Executive Pay, Oxford Review Policy, Vol.21, No.2.
Bebchuk, Lucian and Fried, Jesse 2004 Pay Without Performance:Overview of the Issues, Journal of Applied Corporate Finance, Vol 17 No 4.
La Porta, R., Lopez De Salinas, F., Shleifer, A., and Vishny, R. W., 1998, Law and Finance, Journal of Political Economy Vol.106.


Association in the course directory

Last modified: Mo 07.09.2020 15:29