2019 Corporate Finance and Governance

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Academic unit or major
Graduate major in Industrial Engineering and Economics
Instructor(s)
Inoue Kotaro 
Course component(s)
Lecture
Day/Period(Room No.)
Mon7-8(W9-414)  Thr7-8(W9-414)  
Group
-
Course number
IEE.D434
Credits
2
Academic year
2019
Offered quarter
3Q
Syllabus updated
2019/9/19
Lecture notes updated
-
Language used
English
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Course description and aims

This is a master's course of corporate finance and corporate governance.
This course will follow recent literature of corporate finance such as capital market, corporate governance, capital structure, valuation, mergers and acquisitions, and behavioral corporate finance. In particular, the course will focus on empirical studies in these fields. Participants also discuss actual business cases related to the above topics.

Student learning outcomes

The goal of this course is to understand the priciples of corporate finance so that class participants can start their own researches in this field and other related fields such as investment, corporate management, and accounting.

Keywords

Corporate Finance, Corporate Governance, Asset Pricing, Mergers and Acquisitions, Behavioral Finance

Competencies that will be developed

Intercultural skills Communication skills Specialist skills Critical thinking skills Practical and/or problem-solving skills

Class flow

All the students are expected to read all the assigned papers. Each student will be assigned several papers in the following reading list. The number of assigned paper per student will depend on the class size. The assigned students are expected to read and analyze the paper carefully and prepare presentation about the paper and lead discussion in the class. Other students are expected to read the paper and prepare discussion. In the final two classes, students will discuss cases to have a sense how implications from academic researches and real businesses interact.

Course schedule/Required learning

  Course schedule Required learning
Class 1 Introductionary Lecture: Efficient market and Corporate Finance (Reference Paper) Fama (1991) Efficient Market ii http://www.jstor.org/stable/2328565
Class 2 Theory and Practice Graham, J. and C. Harvey (2001) “The theory and practice of corporate finance: Evidence from the field” Journal of Financial Economics 60, 187-243 Graham, J. and C. Harvey (2001) “The theory and practice of corporate finance: Evidence from the field” Journal of Financial Economics 60, 187-243 http://faculty.fuqua.duke.edu/~jgraham/website/SurveyPaper.PDF
Class 3 Law and Finance La Porta et al. (1998) “Law and Finance” (Assigned Paper) La Porta et al. (1998) “Law and Finance” http://onlinelibrary.wiley.com/doi/10.1111/1540-6261.00457/pdf
Class 4 Corporate Governance Gompers, P.A., J.L.Ishii, and A.Metrick (2003) Corporate Governance and Equity Prices (Assigned paper) Gompers, P.A., J.L.Ishii, and A.Metrick (2003) Corporate Governance and Equity Prices http://papers.ssrn.com/sol3/papers.cfm?abstract_id=278920
Class 5 CEO Bertrand and Mullainathan (2003) Enjoying the Quiet Life? Corporate Governance and Managerial Preferences (Assigned Paper) Bertrand and Mullainathan (2003) Enjoying the Quiet Life? Corporate Governance and Managerial Preferences http://dash.harvard.edu/bitstream/handle/1/3429713/Mullainathan_EnjoyingQuietLife.pdf?sequence=2
Class 6 Management and Firm Performance Nicholas Bloom and John Van Reenen, (2007) Measuring and Explaining Management Practices Across Firms and Countries, Quarterly Journal of Economics 122 (4): 1351-1408. (Assigned Paper) Nicholas Bloom and John Van Reenen, (2007) Measuring and Explaining Management Practices Across Firms and Countries, Quarterly Journal of Economics 122 (4): 1351-1408. http://www.stanford.edu/~nbloom/MeasuringManagement.pdf
Class 7 Managerial Compensation Cai and Vijh (2007), Incentive Effects of Stock and Option Holdings of Target and Acquirer CEOs, Journal of Finance (Assigned Paper) Cai and Vijh (2007), Incentive Effects of Stock and Option Holdings of Target and Acquirer CEOs, Journal of Finance http://faculty.lebow.drexel.edu/CaiJ/JF2007.pdf
Class 8 Large Shareholders Jay Dahyaa, J., O. Dimitrovb, J.J. McConnell (2008) Dominant shareholders, corporate boards, and corporate value: A cross-country analysis (Assigned Paper) Jay Dahyaa, J., O. Dimitrovb, J.J. McConnell (2008) Dominant shareholders, corporate boards, and corporate value: A cross-country analysis http://www.sciencedirect.com/science/article/pii/S0304405X07001389
Class 9 Managerial Overconfidence Malmendier and Tate (2005), CEO Overconfidence and Corporate Investment, Journal of Finance, 2005, 60, 2261-2700 (Assigned Paper) Malmendier and Tate (2005), CEO Overconfidence and Corporate Investment, Journal of Finance, 2005, 60, 2261-2700 http://www.nber.org/papers/w10807
Class 10 Cash Holdings Opler, T., L. Pinkowitz, R. M. Stulz, and R. Williamson (1999), “The Determinants and Implications of Corporate Cash Holdings,”Journal of Financial Economics 52 (1), 3-46. (Assigned Paper) Opler, T., L. Pinkowitz, R. M. Stulz, and R. Williamson (1999), “The Determinants and Implications of Corporate Cash Holdings,”Journal of Financial Economics 52 (1), 3-46. http://fisher.osu.edu/supplements/10/10402/Determinants-cash-holdings.pdf
Class 11 Initial Public Offering Derrien and Womack (2003), "Auctions vs. Bookbuilding and the Control of Underpricing in Hot IPO Markets,'' Review of Financial Studies, 16 (1), 31-61. (Assigned Paper) Derrien and Womack (2003), "Auctions vs. Bookbuilding and the Control of Underpricing in Hot IPO Markets,'' Review of Financial Studies, 16 (1), 31-61. http://www.jstor.org/stable/i253959
Class 12 Mergers and Acquisitions Jesse Ellis, Sara B. Moeller, Frederik P. Schlingemann, René M. Stulz (2012) Globalization, Governance, and the Returns to Cross-Border Acquisitions (Assigned Paper) Jesse Ellis, Sara B. Moeller, Frederik P. Schlingemann, René M. Stulz (2012) Globalization, Governance, and the Returns to Cross-Border Acquisitions http://www.erim.eur.nl/fileadmin/erim_content/documents/EMSS_May_31_Final.pdf
Class 13 Innovation JAN BENA and KAI LI(2014) “Corporate Innovations and Mergers and Acquisitions,” Journal of Finance 69(5) (Assigned Paper) JAN BENA and KAI LI(2014) “Corporate Innovations and Mergers and Acquisitions,” Journal of Finance 69(5) http://onlinelibrary.wiley.com/doi/10.1111/jofi.12059/pdf
Class 14 Case 1: Seagate Technology Topic: Efficient Market and Behavioral Corporate Finance To be distributed in the class. Prepair for case discussion in the class
Class 15 Case 2: HOYA and Pentax Topic: Mergers and Acquisitions, Board of Directors, Large Shareholders To be distributed in the class. Prepair for case discussion in the class

Textbook(s)

n.a.

Reference books, course materials, etc.

Principles of Corporate Finance, Brealey, Myers, and Allen, McGraw-Hill

Assessment criteria and methods

The grade of this course is based on the report for the assigned paper and discussion participation (80%), and class participation in the case study classes (20%).  

Related courses

  • IEE.D302 : Corporate Finance

Prerequisites (i.e., required knowledge, skills, courses, etc.)

Participants are expected to have basic knowledge of finance such as capital assets pricing model (CAPM) beforehand.

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