040273 KU Corporate Finance 2 (MA) (2016W)
- Registration is open from Mo 12.09.2016 09:00 to Th 22.09.2016 14:00
- Deregistration possible until Fr 14.10.2016 14:00
Classes (iCal) - next class is marked with N
Aims, contents and method of the course
Assessment and permitted materials
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% 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.
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.
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
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
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.