Advanced Corporate Finance

Course Outline
Program and year group MSc 28
Track Financial management
Course Advanced Corporate Finance
Abbreviation ACF
Period Block 2, 16th March 2020 – 20th May 2020
Study load 4 ECTS, 25 contact hours, 87 self-study hours
Module lecturer / e-mail Drs. Eduard M. Sprokholt e.sprokholt@nyenrode.nl
Academic responsible Prof. dr. Dennis Vink

1. Introduction

You will master the key concepts and decision tools used in financial management and learn the
financial management practices of companies in a wide range of industries at various stages of the
company life cycle.

The course covers the key conceptual frameworks and theories of corporate finance that any finance
graduate needs to know in order to build a career in finance. Studying relevant papers from the
empirical literature, you will master commonly used research methodologies and become familiar with
key empirical findings, which in turn will deepen your understanding of the determinants of financial
decisions and trade-offs faced by financial decision makers at both the supply-side and the demand-side
of the capital markets.

In the process, you will therefore deepen your understanding of the financial markets, with a focus on
the equity and debt markets. The structure and business practices of various financial intermediaries
including commercial banks, investment banks, venture capital firms, pension funds, and asset
management companies are covered in order to appreciate to what extent these financial stakeholders
can facilitate or hinder the growth and financial performance of a company.

All of this will enhance your understanding of the behavior of the financial stakeholders of the company
including the constraints they impose on the company. This in turn will help you prepare for the search
for capital, the negotiation of financial contracts, managing the relationships of the company with its
financial stakeholders, and the allocation of capital within companies and performance management. It

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Course Outline [MSc28, FM track] [Advanced Corporate Finance] [16th March 2020 – 20th May 2020]
will also help you in exploring career options in the financial services industry and outside it including
positions in business controlling (FP&A) and treasury.

The course covers the following topics:

1. Shareholder Value Creation, Valuation & Pricing of Stock
2. Price Discovery & Introduction to Behavioural Finance
3. Capital Allocation & Shareholder Value Creation
4. Cost of Capital & Pricing of Risk
5. Capital Structure Theories
6. Best Practices in Corporate Financial Management
7. Pay-out Policy
8. Entrepreneurial Finance: Venture Capital & Crowdfunding
9. IPOs
10. Option Applications: Convertibles; Rights Issue; Management Stock Options

2. Objectives

a. Learning objectives
At the end of this course, you are able to:
(1) Understand and explain the relevant properties of the main sources of financing from the
perspective of the company and its capital providers and the trade-offs that are involved in
raising capital based on the theories of capital structure, and design a suitable financing strategy
for a company;
(2) Understand, explain and apply the key conceptual frameworks of corporate finance and
entrepreneurial finance, and the decision-support tools derived from them in the area of capital
budgeting;
(3) Read, critically evaluate, & create basic spreadsheets in MS-excel to help solve financial
management challenges;
(4) Find, process, and next interpret financial information from databases and other sources, based
on the application of conceptual and empirical frameworks of finance;
(5) Find, read, understand, critically evaluate, and effectively communicate your understanding and
analysis of research methods and findings of empirical studies published in leading academic
journals.

b. Relation with learning outcomes of the program

Learning outcome 1: The course aims to develop your knowledge of corporate finance including
theories, research methodologies and empirical findings, and the related financial management
practices.

Learning outcome 2: Thanks to the data analysis question of the first team assignment and the
second question of the second team assignment, you will develop your empirical research skills.

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Course Outline [MSc28, FM track] [Advanced Corporate Finance] [16th March 2020 – 20th May 2020]
Learning outcome 3: The course will enhance your academic reading skills, as the course is organized
around empirical research articles, and includes an assignment question that requires you to write
an academic essay based on a set of such articles including quite recent ones.

Learning outcomes 5 & 7: The course teaches you to look at business issues from the perspectives of
financial stakeholders, which makes it necessary to develop a comprehensive mental picture of the
company in terms of risk and returns, both in the short-run and the long-run, and the various trade-
offs this involves. In addition, the management of relationships with non-financial stakeholders is
analyzed, and the consequences for risk, return, and company value.

c. Integration of Leadership, Entrepreneurship and Stewardship

The course is designed to help raise your confidence in your potential as a finance professional who
effectively takes charge of his/her career in the direction of a leadership role that matches your
interests and skills. By learning how all business functions can contribute to corporate value creation
and the mitigation of business risks, you will also be able to better protect the interests of the financial
stakeholders of the company, thus ensuring the sustainability of the company and its businesses. This in
turn will also help you set apart from other finance professionals who oftentimes have a more limited
perspective on the finance domain. Moreover, by learning the essence of entrepreneurial finance, you
will develop a better understanding of how to evaluate and finance entrepreneurial opportunities.

d. Academic competences
Thanks to the many empirical studies covered in the course and the team assignment which includes
the writing of a short essay based on various academic articles, you will be able to develop a range of
academic skills, including generic academic skills (reading, reasoning, critically evaluating, writing) as
well as specific ones for the finance domain (i.e. mastering of empirical research methodologies). In
addition, the team assignment includes a data exercise helping to develop quantitative research skills.
The aim is to thus prepare you for the challenges of writing an MSc thesis on a topic in the domain of
corporate or entrepreneurial finance.

3. Format of the course

Class structure
Every class a new topic is introduced and new conceptual frameworks. In the next class, the topic is
explored further with the help of “Questions of the Day” posted in separate documents on Canvas,
covering the same topic and asking you to prepare answers to these questions. Based on this structure,
you will be able to receive feedback on your comprehension of course material throughout the course.
Individual classes are closely interconnected. Realize that this structure requires you to prepare for each
class and not to skip a single class: this is an intensive course and progress will be speedy.

Study teams
You are asked to form study teams with no more than 4 members in total for the team assignments.

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Course Outline [MSc28, FM track] [Advanced Corporate Finance] [16th March 2020 – 20th May 2020]
4. Study material

The course aims to reach the learning objectives by covering the core areas of financial management
and the related theories of corporate finance with the help of a textbook and empirical articles from
academic journals. In addition, multiple data sources are consulted including corporate websites and
online videos indicated in separate Questions of the Day documents posted on Canvas.

Textbook
We will use one textbook covering the basics: Brealey, Myers, Marcus, Fundamentals of Corporate
Finance, 7th or later edition.

Academic articles
Articles from leading academic journals, mostly empirical studies, are available through the Nyenrode
library website (EBSCO) and online, often also in working paper version at SSRN. You are not expected
to read and comprehend all the listed articles fully. Reading instructions and guidance are included in
the Questions of the Day document for each class.

Supplementary articles
Supplementary articles from leading journals with empirical findings and survey articles are included as
well. You are not expected to consult these articles. Depending on your personal interest, you may want
to read some of them selectively. One of the purposes of including them is to encourage you to explore
research topics for your thesis.

Cases & numerical exercises

The Questions of the Day documents posted on Canvas include cases and exercises which we will
discuss in class.

Team assignments
Posted in separate documents on Canvas at the beginning of the course.

Data sources
Links to various data sources are included below in order to become familiar with the facts of corporate
finance. You are expected to be able to understand most of the data including the underlying
computations on your own as only a few of them will be explicitly covered in class.

5. Assessment

Description Weighting Learning Individual/team Deadline Retake

objectives
Assignment #1 15% #3; #4 Team April 14, July 23,
10:00am 10:00am
Assignment #2 15% #1; #5 Team May 14, July 23,
10:00am 10:00am
Final exam 70% #1; #2; #3; #5 Individual May 18 Aug 6

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Course Outline [MSc28, FM track] [Advanced Corporate Finance] [16th March 2020 – 20th May 2020]
a. General
Please be aware that the answers need to be uploaded on Canvas, and identical hardcopy versions
need to be submitted at the beginning of class on April 14 (Assignment #1) and May 14 (Assignment
#2), both at 10:00am. Please use the following title for the assignments:
MSc28 Last name First name Assignment #1 (resp. #2) ACF.doc.

When documents are uploaded on Canvas they will be scanned by Nyenrode’s anti-plagiarism
software. If plagiarism is detected, the Exam Committee will be notified, and it will decide on the
consequences. Assignments are graded within 3 weeks of the submission date.

Assignments that are submitted after the deadline will not be graded.

The threshold grade for the team assignments and for the individual exam is a 5.50 in order to
receive a passing grade in the course. If this threshold grade is not met, the student will be required
to retake the assignment and/or exam. The threshold grade for the retake is also a 5.50. The
threshold grade for the entire course is a 5.50.

The rules concerning assessment and academic misconduct (e.g. plagiarism) can be found in the Rules &
Regulations of the program.

b. Assessment criteria of the team assignment

The first team assignment is due at the beginning of session #7 on April 14, and has the following two
components:
Part A (40%): Capital budgeting question and stock valuation question, both in MS Excel;
Part B (60%): Data analysis question including extracting data from the database Datastream and
statistical analysis.

The second team assignment is due at the beginning of session #10 on May 14, and has the following
two components:
Part A (40%) Case analyses;
Part B (60%) Analysis of empirical research articles.

Detailed instructions and grading criteria are included in the team assignment documents themselves,
posted on Canvas.

c. Feedback on the assignment

Assignment questions are discussed in class on April 14 & May 14. Additional customized feedback will
be received after the submitted work has been graded.

d. Final exam
The final, closed-book exam includes qualitative and numerical questions, testing your mastery of the
subject matter of the course including the content of the team presentations, and your ability to
effectively communicate your understanding and analyses. The exam text will include all main formulas
used in the course.

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Course Outline [MSc28, FM track] [Advanced Corporate Finance] [16th March 2020 – 20th May 2020]
6. Course structure

Class 1 Shareholder Value Creation, Valuation & Pricing of Stock March 24

Functional areas Treasury & Investor Relations

Financial institutions Institutional investors; brokerage; hedge funds
Core concepts DDM; Perpetuity; Growth perpetuity; required rate of return; ROE;
value-creating growth; valuation ratios; equity beta; cost of equity;
Informational efficiency; Efficient market hypothesis (EMH); Random walk;
Informed trading; Insider trading; Going long; Going short; hedge funds;
Event Study; Marginal investor; AR; CAR; CSR; Principal-agent problem at
listed companies; Greenwashing; Trade-offs.

Textbook
Review Chapter 1 and closely study Chapter 7 (“Valuing Stocks” including DDM & EMH)

Data
https://www.nasdaq.com/quotes/
https://www.reuters.com/finance/markets/indices
Your own favorite website with stock data.

Articles
Krüger, P. (2015). Corporate goodness and shareholder wealth. Journal of Financial Economics,
115(2), 304-329.

Supplementary articles about methodology of event studies

Khotari, S. P., Warner, J. B. (2006). Econometrics of Event Studies. Chapter 1 in B. Espen Eckbo (ed.),
Handbook of Corporate Finance: Empirical Corporate Finance, Volume A (Handbooks in Finance
Series, Elsevier/North-Holland). Available also at:
https://www.bu.edu/econ/files/2011/01/KothariWarner2.pdf
MacKinlay, C. A. (1997). Event studies in economics and finance. Journal of Economic Literature,
35(1), 13-39.

Class 2 Price Discovery & Introduction to Behavioral Finance March 26

Functional area Investor Relations

Core Concepts Price bubbles; Behavioral biases; Noise traders; Investor sentiment;
sentiment beta; Arbitrageurs; Short-selling; Arbitrage costs; Informed
trading; Market order; Limit order; Price discovery process; Going short;
Price informativeness;
Financial institutions Institutional investors; hedge funds; brokerage

Textbook
Chapter 7 (pages about behavioral finance)

Articles

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Course Outline [MSc28, FM track] [Advanced Corporate Finance] [16th March 2020 – 20th May 2020]
Baker, M., & Wurgler, J. (2007). Investor Sentiment in the Stock Market. Journal of Economic
Perspectives, 21(2), 129-152.
Shleifer, A., Summers, L. H. (1990). The Noise Trader Approach to Finance. Journal of Economic
Perspectives, 4(2), 19-33.

Supplementary articles
Baruch, S., Panayides, M., & Venkataraman, K. (2017). Informed trading and price discovery before
corporate events. Journal of Financial Economics, 125(3), 561-588.
Greenwood, R., Shleifer, A., You, Y. (2019). Bubbles for Fama. Journal of Financial Economics, 131(1),
20-43.
Hirshleifer, D. (2015) Behavioral finance. Annual Review of Financial Economics, 7(1), 133-159.
Available at https://pdfs.semanticscholar.org/8c40/c029ddf7e350076db0ed0ac06e60666bafc2.pdf

Class 3 Capital Allocation & Shareholder Value Creation March 31

Functional area Financial Planning & Control

Core concepts Value Creation; NPV; IRR; Profitability Index; Internal Capital Market
Managerial Sentiment; Delegation of decision-making authority;
WACC fallacy

Textbook
Chapters 8, 9, & 10.

Articles
Duchin, R., & Sosyura, D. (2013), Divisional Managers and Internal Capital Markets. Journal of
Finance, 68(2), 387-429.
Graham, J. R., Harvey, C. R., & Puria, M. (2015). Capital allocation and delegation of decision-making
authority within firms. Journal of Financial Economics, 115(3), 449-470.
Jiang, F., Lee, J.A., Martin, X., & Zhou, G. (2019). Manager Sentiment and Stock Returns. Journal of
Financial Economics, 132(1), 126-149.
Krüger, P., Landier, A., & Thesmar, D. (2015). The WACC fallacy: The real effects of using a unique
discount rate. Journal of Finance, 70(3), 1253-1285.
Graham, J. & Harvey, C. (2002), How do CFOs make capital budgeting and capital structure
decisions? Journal of Applied Corporate Finance, 15(1), 8-23. Also available at:
https://faculty.fuqua.duke.edu/~charvey/Research/Published_Papers/P76_How_do_CFOs.pdf

Supplementary articles about behavioral corporate finance

Baker, M., Wurgler. J. (2013). Chapter 5 - Behavioral Corporate Finance: An Updated Survey.
Handbook of the Economics of Finance, Volume 2, Part A, 357-424.
Ben-David, I., Graham, J. R., & Harvey, C. R. (2013). Managerial Miscalibration. Quarterly Journal of

Class 4 Cost of Capital & Pricing of Risk April 2

Functional area Treasury

Core concepts WACC; risk premium; market risk; market risk premium; equity beta;
business beta; systematic risk; idiosyncratic risk; diversification; CAPM;
project risk; credit rating; credit risk-premium; business risk; financial risk;
financial leverage; operating leverage; standard deviation of returns
Financial institutions Institutional equity & bond investors; commercial banks

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Course Outline [MSc28, FM track] [Advanced Corporate Finance] [16th March 2020 – 20th May 2020]
Others Credit rating agencies

Textbook
Chapters 11, 12, & 13

Data
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/Betas.html US data
http://people.stern.nyu.edu/adamodar/New_Home_Page/datacurrent.html EU & other linked data
http://aswathdamodaran.blogspot.nl/2011/04/alternatives-to-capm-part-4-market.html

Articles
Bustamante, M. C., & Donangelo, A. (2017). Product Market Competition and Industry Returns
Review of Financial Studies, 30(12), 4216–4266.

Class 5 Capital Structure Theories April 7

Functional area Treasury

Core concepts Pay-off diagram of a financial contract; Seniority; M&M irrelevance
propositions; Trade-off theory; Information asymmetry; Lemon’s problem;
Agency costs of debt; Financial constraints; Financial distress; Costs of
financial distress; Pecking-order theory; Debt covenants; Underinvestment
problem; Overinvestment problem; Market-timing; Market sentiment
Financial institutions Commercial banks; Institutional bond investors
Others Rating agencies; Corporate finance advisory units of the Big Four

Textbook
Chapters 14 & 16

Leverage & related data

http://people.stern.nyu.edu/adamodar/New_Home_Page/datafile/dbtfund.html US data
http://people.stern.nyu.edu/adamodar/New_Home_Page/datacurrent.html Various linked files

Credit risk data

https://www.spratings.com/documents/20184/774196/2016+Annual+Global+Corporate+Default+St
udy+And+Rating+Transitions.pdf/2ddcf9dd-3b82-4151-9dab-8e3fc70a7035
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/ratings.htm
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/ctryprem.html

Credit rating essentials

https://www.spratings.com/documents/20184/774196/Guide_to_Credit_Rating_Essentials_Digital.
pdf

Articles
Croci, E., Doukas, J. A., & Gonenc, H. (2011). Family Control and Financing Decisions. European
Financial Management, 17(5), 860-897.
DeAngelo, H., Gonçalves, A. S., & Stulz, R. M. (2018). Corporate Deleveraging and Financial Flexibility,
Review of Financial Studies, 31(8), 3122-3174.
Degryse, H., de Goeij, P., & Kappert, P. (2012). The impact of firm and industry characteristics on
small firms’ capital structure. Small Business Economics, 38(4), 431–447.

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Course Outline [MSc28, FM track] [Advanced Corporate Finance] [16th March 2020 – 20th May 2020]
Jensen, M. (1999). Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers. American
Economic Review, 76(2), 323-329.
Larkin, Y. (2013). Brand perception, cash flow stability, and financial policy. Journal of Financial
Economics, 110(1), 232-253.
Myers, S. C. (1993). Still Searching for Optimal Capital Structure. Journal of Applied Corporate
Finance, 6(1), 4-14.

Class 6 Best Practices in Corporate Financial Management April 9

Functional areas Treasury; Financial Planning & Analysis

Article
Graham, J. & Harvey, C. (2002), How do CFOs make capital budgeting and capital structure
decisions? Journal of Applied Corporate Finance, 15(1), 8-23. Also available at:
https://faculty.fuqua.duke.edu/~charvey/Research/Published_Papers/P76_How_do_CFOs.pdf

Class 7 Pay-out Policy April 14

Functional areas Treasury; Financial Planning & Analysis

Core Concepts Cash dividend; stock dividend; stock split; stock repurchase; dividend
neutrality; clienteles; dividend signaling theory; long-run stock
outperformance & Jensen’s alpha; calendar-time approach
Financial Institutions Institutional investors

Textbook
Chapters 17 & 18

Data
http://people.stern.nyu.edu/adamodar/New_Home_Page/datafile/divfcfe.html US data
http://people.stern.nyu.edu/adamodar/New_Home_Page/datacurrent.html EU & others, linked files

Articles
De Cesari, A., Ozkan N. (2015). Executive incentives and payout policy: Empirical evidence from
Europe. Journal of Banking and Finance, 55(6), 70-91.
Manconi, A., Peyer, U., & Vermaelen, T. (2019). Are Buybacks Good for Long-Term Shareholder
Value? Evidence from Buybacks around the World. Journal of Financial and Quantitative Analysis,
54(5), 1899-1935.

Class 8 Entrepreneurial Finance: Venture Capital & Crowdfunding April 21

Functional area Entrepreneurship

Core concepts Financial bootstrapping; Dilution; Venture capital; Screening; Monitoring;
Staged financing; Security Design; Convertible Cumprefs; Liquidation event;
Incentive alignment; Exit; Term sheet; Various contracting terms;
Misappropriation risk; Targeted IRR
Financial institutions Venture Capital firms; Crowdfunding platforms

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Course Outline [MSc28, FM track] [Advanced Corporate Finance] [16th March 2020 – 20th May 2020]
Others Venture financing units of corporates (Corporate Venture Capital); private
investors including Business Angels

Data
Invest Europe (2018). 2017 European Private Equity Activity, Statistics on Fundraising, Investments,
and Divestments. Available at:
https://www.investeurope.eu/research/activity-data/annual-activity-statistics/
Invest Europe (2018). Global investment makers survey. Available at:
https://www.investeurope.eu/media/742312/investeurope_comres_global-investment-decision-
makers-survey-2018.pdf
https://www.crunchbase.com/

Articles
Block, J.H., Colombo, M.G., Cumming, D.J. et al., Vismara, S. (2018). New players in entrepreneurial
finance and why they are there. Small Business Economics 50(2), 239-250.
Gompers, P., & Lerner, J. (2001). The Venture Capital Revolution. Journal of Economic Perspectives,
15(2), 145-168.
Kaplan, S.N., & Stromberg, P. (2003). Financial Contracting Theory Meets the Real World: An
Empirical Analysis of Venture Capital Contracts. Review of Economic Studies, 70(2), 1-35.

Class 9 IPOs May 12

Functional area Treasury

Core Concepts Underwriting; Book-building; Stock allocation; Underpricing; Signaling;
Quality certification; Greenshoe option; Price stabilization; Cross-listing;
ADRs; SOX; Segmented markets; Bonding; Price informativeness.
Financial Institution Investment Banks; Institutional Investors
Others Capital market advisory units of Big Four

Data:
https://site.warrington.ufl.edu/ritter/files/2017/04/IPOs2016VC-backed.pdf
https://www.renaissancecapital.com/Review/Renaissance-Capital-2017-Global-Annual-Review.pdf
https://site.warrington.ufl.edu/ritter/other-links/

Conflicts of interests
https://www.forbes.com/sites/jayritter/2014/06/19/why-is-going-public-so-costly/#2b540c6e4ff0
https://www.forbes.com/sites/jayritter/2014/08/07/googles-ipo-10-years-later/#1a77e00a2e6c
https://www.sec.gov/news/press/2003-54.htm

Articles
Brau, J. C., & Fawcett, S. E. (2006), Initial Public Offerings: An Analysis of Theory and Practice. Journal
of Finance, 61(1), 399-436.
Cornelli, F. & Goldreich, D. (2002), Book-building and Strategic Allocation. Journal of Finance, 56(6),
2337-2369.
Lowry, L., Officer, M.S., Schwert, G.W. (2010). The Variability of IPO Initial Returns. Journal of
Finance, 65(2), 425-465.

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Course Outline [MSc28, FM track] [Advanced Corporate Finance] [16th March 2020 – 20th May 2020]
Class 10 Convertibles; Rights Issue; Management Stock Options May 14

Core concepts: Convertibles; Conversion price; Exchange ratio; Incentive alignment;

Management Stock Options; Vesting; Managerial Overconfidence;
Embedded options

Expert advice on designing management stock options

https://hbr.org/2000/03/what-you-need-to-know-about-stock-options

Article
Dutordoir, M., Lewis, C., Seward, J.,Veld, C. (2014). What we do and do not know about convertible
bond financing. Journal of Corporate Finance, 24(2), 3-20.
Malmendier, U., & Tate, G.(2015). Behavioral CEOs: The Role of Managerial Overconfidence,
Journal of Economic Perspectives, 29(4), 37-60. Available at:
https://eml.berkeley.edu/~ulrike/Papers/JEP_BehavioralCEOs_WITH_APP.PDF

-------------------------------------------------------------------------------------------------------------------------------------

Supplementary topics, not covered in the course nor on the exam, for those of you with
strong interests in working capital management, debt contracting, banking, risk
management, and/or financial advisory.

Working capital management

Functional areas Treasury; Financial planning & analysis; Purchasing

Financial institutions Commercial banking; Factoring companies

Textbook
Chapters 19 & 20

Data
http://people.stern.nyu.edu/adamodar/New_Home_Page/datafile/wcdata.html US data
http://people.stern.nyu.edu/adamodar/New_Home_Page/datacurrent.html EU & other linked files

Expert advice
http://treasurytoday.com/2009/10/supplier-finance
https://www.barclayscorporate.com/products-and-solutions/financing/supplier-finance.html

Supplementary articles
Almeida, H. , Campello, M. & Weisbach, M. S. (2004). The Cash Flow Sensitivity of Cash. Journal of
Finance, 59(4), 1777-1804.
Cuñat, V. (2007). Trade Credit: Suppliers as Debt Collectors and Insurance Providers. Review of
Financial Studies, 20(2), 491-527.
Giannetti, M., Burkart, M., & Ellingsen, T. (2011). What You Sell Is What You Lend? Explaining Trade
Credit Contracts. Review of Financial Studies, 24(4), 1261-1298.
McMillan, J., & Woodruff, C. (1999). Interfirm Relationships and Informal Credit in Vietnam
Quarterly Journal of Economics, 114(4), 1285-1320.

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Course Outline [MSc28, FM track] [Advanced Corporate Finance] [16th March 2020 – 20th May 2020]
Petersen, M.A., & Rajan, R.G. (1997). Trade Credit: Theories and Evidence. Review of Financial
Studies, 10(3), 661-691.

Debt contracting

Functional area Treasury

Core concepts Control rights; covenants; renegotiation
Financial institutions Commercial banks; Bond investors

Articles
Campello, M., & Gao, J. (2017). Customer concentration and loan contract terms. Journal of Financial
Economics, 123(1), 108-136.
Chava, S., & Roberts, M.R. (2008). How Does Financing Impact Investment? The Role of Debt
Covenants. Journal of Finance, 65(5), 2085-2121.
Denis, D.J., & Wang, J. (2014). Debt covenant renegotiations and creditor control rights. Journal of
Financial Economics, 113(3), 348-367.
Nini, G., Smith, D. C., & Sufi, A. (2009). Creditor control rights and firm investment policy, Journal of
Financial Economics, 92(3), 400-420.
Smith, C. W., & Warner, J.B. (1979). On financial contracting: An analysis of bond covenants. Journal
of Financial Economics, 7(2), 117-161.

Risk Management

Textbook
Chapter 24

Survey Data
http://www.oliverwyman.com/content/dam/oliver-wyman/v2/publications/2018/January/2018-
afp-risk-survey.pdf
http://www.aon.com/2017-global-risk-management-survey/pdfs/2017-Aon-Global-Risk-
Management-Survey-Executive-Summary-062617.pdf pages 2-11

Articles
Amberg, N. and Friberg, R. (2016), Three Approaches to Risk Management—and How and Why
Swedish Companies Use Them. Journal of Applied Corporate Finance, 28(1), 86-94.
Froot, K. A., Scharfstein, D. S. and Stein, J. C. (1994), A framework for risk management. Journal of
Applied Corporate Finance, 7(3), 22-33. Also available at:
https://pdfs.semanticscholar.org/6ad0/6a9615de55c754f0534bb5731e83514be417.pdf
Gilje, E.P., & Taillard, J.P. (2017). Does Hedging Affect Firm Value? Evidence from a Natural
Experiment. Review of Financial Studies, 30(12), 4083-4132.

Supplementary
Kaplan, R. S. & Mikes, A. (2016). Risk Management—the Revealing Hand. Journal of Applied
Corporate Finance, 28(1), 8-18.

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Course Outline [MSc28, FM track] [Advanced Corporate Finance] [16th March 2020 – 20th May 2020]