CORPORATE FINANCE & GOVERNANCE

Course Description

This module is an analysis of financial structures and the evaluation of the

underlying real assets; global strategic planning and controlling; corporate
governance structures; legal matters and global tax structures; international
corporate policy formulation; international money and banking. Topics
further include capital structure, executive compensation, diversification and
restructuring, bankruptcy, venture and private equity.

Course Requirements and Credits

Course Requirements : Graduate status

Target Audience

Doctoral students.

Learning Objectives

The module provides a solid framework for critically evaluating the latest
findings in the field of corporate finance and the developments lying ahead
of us. A range of analytical techniques and financial theories will be
developed in order to optimize financial decision making.

Suggested Readings

» The New Corporate Finance, Donald H. Chew, ISBN: 007233973X,

August 2000, Publisher: McGraw-Hill Companies, Edition Number:
3,
» Financial Theory and Corporate Policy, Thomas E. Copeland, J.
Fred Weston, ISBN: 0201106485, July 1988, Publisher: Addison-
Wesley, Edition Number: 3,
» Financial Markets & Corporate Strategy, Mark Grinblatt, Sheridan
Titman, ISBN: 0072294337, October 2001, Publisher: McGraw-Hill
Companies, Edition Number: 2
» Case Problems In Finance, Carl Kester, Richard Ruback, Thomas
R. Piper, Scott Mason, William E. Fruhan, ISBN: 0256145962,
January 1997, Publisher: McGraw-Hill Professional Publishing,
Edition Number: 11

Further readings:

» Corporate Governance, John L. Colley, Wallace Stettinius,

Jacqueline Doyle, Jacqueline L. Doyle, George Logan, ISBN:
0071403469, July 2003, Publisher: McGraw-Hill Companies, Edition
Number: 1.

© SMC Swiss Management Center AG Page 1 of 2

 » Foundations for Financial Economics, Chi-fu Huang, Robert H.
Litzenberger, ISBN: 0135006538, January 1998, Publisher: Simon &
Schuster Adult Publishing Group, Edition Description: Xerox copy
» A Non-Random Walk Down Wall Street, Andrew W. Lo, Craig A.
Mackinlay, A. Craig MacKinlay, ISBN: 0691092567, December
2001, Publisher: Princeton University Press,
» Advances in Behavioral Finance, Richard H. Thaler (Editor), ISBN:
0871548445, October 1993, Publisher: Russell Sage Foundation

Course Outline

» Project Valuation under uncertainty - incremental analysis, decision

trees, variance analysis, project interaction with economy.
» Asymmetric information models
» Econometric Issues of Industry Clustering, Event-Time Clustering
and Panel Data
» Dividend Policy. Capital Structure, Dividends and Signaling Theory.
Equilibrium. Agency Theory. Conflicts and reductions.
» Miller and Modigliani.
» Tax-based capital structure theories
» Corporate and Personal Taxes
» Capital Expenditure Investment
» R & D Expenditures
» Issuance of Bonds / Retirement of Bonds
» Bank Credit Lines / Monitoring Capital Structure and Market
Efficiency, the Theoretical CAPM and Empirical Event Studies
Timing theories
» Rational Utility Maximizing Asset Pricing Models
» Order models of capital structure
» Dividend policy theories. Stock splits. Stock dividends. Reverse
splits. Share repurchase
» Cash dividends. Dividend Clienteles. Debt Clienteles
» The decision of IPO
» Investor Psychology
» Market Bubbles and Positive Feedbacks
» Institutional Frictions
» News, Volatility, and Asymmetry
» Mergers and acquisitions. Corporate restructurings. Spin-offs, sell-
offs and equity carveouts
» LBOs. Leveraged Recaps
» Corporate control
» Corporate governance issues. Executive compensation
» Corporate focus and internal capital markets
» Financial distress and bankruptcy. Bankruptcy costs and capital
» Corporate risk management and hedging
» Governments in Asset Markets: Case of Exchange Rates
» Security Design / Project Finance

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