FINA511-17A (HAM)
Advanced Corporate Finance
30 Points
Staff
Convenor(s)
Krishna Reddy
4916
MSB.2.08
Wednesday 10am - 12noon
krishna.reddy@waikato.ac.nz
|
Lecturer(s)
Krishna Reddy
4916
MSB.2.08
Wednesday 10am - 12noon
krishna.reddy@waikato.ac.nz
|
Administrator(s)
Librarian(s)
You can contact staff by:
- Calling +64 7 838 4466 select option 1, then enter the extension.
-
Extensions starting with 4, 5 or 9 can also be direct dialled:
- For extensions starting with 4: dial +64 7 838 extension.
- For extensions starting with 5: dial +64 7 858 extension.
- For extensions starting with 9: dial +64 7 837 extension.
Paper Description
Paper Structure
Learning Outcomes
Students who successfully complete the course should be able to:
Assessment
Assessment Components
The internal assessment/exam ratio (as stated in the University Calendar) is 1:0. There is no final exam.
Required and Recommended Readings
Required Readings
Advanced Corporate Finance 2016
Order of Articles
Overview
Vissing-Jorgensen, A. (2004). Perspective on Behavioral Finance: Does "Irrationality" Disappear with Wealth? Evidence from Expectations and Actions. Kellogg School of Management, Northwestern University, NBER, and CEPR, 139 - 208. http://www.nber.chapters/c11443.pdf
Shiller, R. J. (2003). From Efficient Markets Theory to Behavioral Finance. Journal of Economic Perspective, Vol. 17(1), 83-104.
Fama, E.F. (1991). Efficient Capital Markets: II. Journal of Finance, Vol. 46(5): 1575-1617. http://www.jstor.org/stable/2328565
Brounen, D., de Jong, A. and Koedijk, K.(2004). Corporate Finance in Europe: Confronting Theory with Practice. Financial Management, Vol. 33(4) : 71-101. http://www1.fee.uva.nl/fm/PAPERS/Brounen/brounen.pdf
Asset Pricing, Investment Theory, and Portfolio Management
Lewellen, J.(2014). The cross section of expected stock returns. Critical Finance Review (forthcoming), 1-33. http://faculty.tuck.dartmouth.edu/images/uploads/faculty/jonathan-lewellen/ExpectedStockReturns.pdf
Pastor, L. and Stambaugh, R. F. (2003, June). Liquidity Risk and Expected Stock Returns. The Journal of Political Economy, Vol. 111(3): 642-685.
Switzer, L. N. and Picard, A. (2013). Idiosyncratic Volatility, Liquidity Risk, and Expected Stock Returns. Retrieved from http://www.mfsociety.org/modules/modDashboard/uploadFiles/conferences/MCSymposium~56~MEAckL7LgqYF8zSAVEXYaZ1dhpbs.pdf
Liu, W. (2008). A liquidity-augmented CAPM over 1926 to 1963. SSRN Working paper. 1-41
Bartholdy J. and Peare., P. (2005) Estimation of expected return: CAPM vs Fama and French. International review of Financial Analysis,Vol. 14(4): 407-427.Capital Structure and Corporate Financing Decisions
Leary, M. T. and Roberts, M. R. (2005). Do firms rebalance their capital structures. Journal of Finance, Vol. LX(6): 2575-2620. http://finance.wharton.upenn.edu/~mrrobert/resources/Publications/Duration.pdf
Oztekin, O. (2015). Capital Structure Decisions around the World: Which Factors Are Reliably Important? Journal of Financial and Quantitative Analysis, Vol. 50(3), 301-323.
Lemmon, M. L. and Zender, J. F. (2008). Debt Capacity and Tests of Capital Structure Theories. Working paper, University of Utah. 1-49.
http://ecocomm.anu.edu.au/media/1491799/lemmon_12may2008_004.pdf
Kashyap, A. and Zingales, L. (2010). The 2007-8 financial crisis: Lessons from corporate finance. Journal of Financial Economics, Vol. 97, 303-305.
http://faculty.chicagobooth.edu/anil.kashyap/research/papers/The_2007-2008_Financial_Crisis_Lessons_from_Corporate_Finance.pdf
Payout Decisions
Handley, J. C. (2008, February). Dividend policy: Reconciling DD with MM. Journal of Financial Economics, Vol. 87(2): 528-531.
DeAnglo, H., DeAnglo, L. and Skinner, D. J. (2004). Are dividends disappearing? Dividends concentration and the consolidation of earnings. Journal of Financial Economics, Vol. 72(3): 425-456.
Brav, A., Graham, J. R., Harvey, C. R. and Michaely, R. (2005). Payout policy in the 21st century. Journal of Financial Economics, Vol. 77 (3), 483-527. http://ac.els-cdn.com/S0304405X05000528/1-s2.0-S0304405X05000528-main.pdf?_tid=410ef378-98ee-11e3-bab7-00000aab0f26&acdnat=1392763661_9c88cb29186c90d24c47f787c0cac684M&As, Security Offerings, and Investment Banking
Devos, E., Kadapakkam, P-R. and Krishnamurthy, S. (2009). How Do Mergers Create Value? A Comparison of Taxes, Market Power, and Efficiency Improvements as Explanations for Synergies. The Review of Financial Studies, Vol. 22(3): 179-211.
Savor, P. G. and Lu, Q. (2009, June). Do Stock Mergers Create Value for Acquirers? Journal of Finance, Vol. 64(3): 1061-1097.
Ritter, J. R. (2003). Differences between European and American IPO Markets. European Financial Management, Vol. 9(4): 421-434.
Corporate Governance
Bhagat, S. and Bolton, B. (2008, June). Corporate governance and firm performance. Journal of Corporate Finance, Vol. 14(3): 257-273.
Erkens, D. H., Hung, M. and Matos, P. (2012). Corporate Governance in the 2007-2008 Financial Crisis: Evidence from Financial Institutions Worldwide. Journal of Corporate Finance (forthcoming), 1-55. http://www.darden.virginia.edu/web/uploadedFiles/Darden/Faculty_Research/Directory/Full_time/EHM_CorporateGovernanceCrisis_2012_01_04%20JCF.pdf
Small Business Finance
Cole, R. (2008, March). What do we know about the capital structure of privately held firms? Evidence from survey of Small Business Finance. MPRA Paper No. 8086: 1-58.
Berger, A.N. and Udell, G.F. (1998). The Economics of Small Business Finance: The Roles of Private Equity and Debt Markets in the Financial Growth Cycle. Journal of Banking and Finance 22(6): 613-673.
Recommended Readings
Other Resources
Online Support
Workload
You are required to spend 300 learning hours in this paper as follows:
1: Lectures: Students will participate in open discussions about the assigned corporate finance readings. Each assigned reading is to be reviewed prior to class. Attendance is required. (3 hours per week for 8 weeks: 24 total hours)
To understand the current thinking in the existing literature and gain an ability to critically analyse what is required in your research paper.
2 : Course Readings: Students will complete the assigned readings before class. (8 weeks of readings at approximately 11 hours per week: 88 total hours)
To gain an advanced knowledge of corporate finance theory.
3 : Executive Summaries: Write a one page summary for each of the assigned readings and submit it before class. (approx 24 summaries at approx 1.5 hours each: 36 total hours)
Gain ability to summarize complex work in your own words. To determine important points as well as critically analyse the paper. NOTE: Attendance will be taken in class. Executive summaries will NOT be counted as completed if you are not in class for the entire class session to discuss the assigned paper(s).
4 : Analysis and debate: Several lecture times are set aside for the assigned groups to debate a paper (or assigned chapters from a book). There are 4 groups. Each week, two groups will be 'alive' and required to engage and maintain the discussion for the entire 50 mins of the class. The other two groups will be required to assess their performance and assist if appropriate. (Total of 8 debates. 4 of which you are 'engaged' and 4 of which you assess. Approx 4 hours to prepare for the debate plus one hour in class. 5 x 4 = 20 + 4 hours of assessment: total 24 hours)
This activity will serve to mingle all students. It will ensure that students prepare for class and participate while in class. It will provide 'practice' in critical analysis.
5 : Seminar Presentation: Present to the class a detailed description (and analysis) of two papers from the most recent (past 5 years) finance literature. Presentation time: 25 mins. (Total time approx 21 hours).
To gain an in depth knowledge of one specific area in finance which could be used to delve deeper into the topic in your research paper.
6 : Summarise other students' presentations: Attend at least 5 seminar presentation sessions, not counting your own. From these 5 pick one paper from each to summarize and submit. (5 class hours plus 3 hours writing: total 8 hours)
To broaden your knowledge in the literature. To observe and learn presentation skills by observing others.
7 : Research Paper: Complete a research paper which is fit for publication. Criteria will be determined in class. (Total time approx 99 hours)
To gain confidence that your research ability and written skills are functioning at the highest possible level.
Linkages to Other Papers
Prerequisite(s)
FINA311 or equivalent
Restriction(s)
FINA503