| Corporate Finance -
Semester
alef 2011-12 Yossi Spiegel |
|
|
|
|
|
|
| Description:
This course is intended for research
students
either at the master or Ph.D level. The main purpose of the
course
is to give research students tools to write their own research in
corporate
finance and to give them enough background about the field so they can
comfortably read the current literature in the field. Given its purpose
the course will not merely cover the basic ideas but will also go into
technical details which are crucial for writing research papers (as
such
the course will not be "easy" and will require substantial amount of
work).
The course focuses on theoretical models of capital structure and
payout
policies. We will start with the M&M invariance results (both
for capital structure and dividend payments) and then will examine
models
that explain why capital structure and payout policies do matter.
The driving forces in these models will be taxation, agency frictions,
asymmetric information, the market for corporate control, and
interaction
with competition in the product market. Syllabus |
|
|
| Evaluation:
Evaluation will be based on a final exam.
The final exam will be held on Sunday,
12/2/2012 (but
check the yedion
to be 100% certain). The exam will be open
book - you would be able to use any
material you'd like.
Important remark: If you'll try hard enough, you can probably obtain (exact or similar) solutions to many of the problems in your problem sets from previous years. In order to clear any doubts, let me clarify that consulting these solutions amounts to cheating. I can only say that I expect you to resist the temptation and not consult past solutions. |
|
|
| Additional material:
For an excellent survey of the literature on capital structure, see Harris
M and A. Raviv, (1991) "The Theory of Capital Structure," Journal of
Finance,
46(1), 297-355.
Another
useful
overview of the literature is Myers
S. "Capital Structure," Journal of Economic Perspectives, 15(2), 81-102. |
| The tentative plan for the course* |
| Week | Topic | Readings | Problems |
| Week 1: Oct30 | Brief introduction
M&M |
Empirical evidence on capital structure and payout policies | |
| M&M with corporate and
personal
taxes M&M the tradeoff theory - ppt |
Topic 2: Tax-based theories of capital structure | ||
| Week 2-3: Nov 6-13 | Tax based models of capital structure: the "tradeoff" theory | Kraus
and Litezenberger, JF 1973 De Angelo and Masulis, JFE 1980 |
|
Agency models
of capital
structure:
|
Topic
3:
Agency models of capital structure
|
||
|
|
The over- and underinvestment problems | Berkovitch and Kim, JF 1990 |
|
| |
The soft
budget constraint The soft budget constraint problem - ppt |
Dewatripont
and Maskin, RES 1995 |
|
|
|
Debt renegotiation Gertner and Scharfstein - ppt |
|
Problem
set 2 |
| Week 6: Dec 4 | Credit
rationing - Ch. 3-4 in Tirole Credit rationing - ppt |
|
|
|
|
Grossman and Hart 1982 - ppt |
|
|
| Week 8: Dec
18 |
|||
| Week 9: Dec 25 | Hanukka |
||
|
|
|
|
|
|
|
|
Myers and Majluf, JFE 1984 Rock, JFE 1986 |
Problem
set 3 |
| Week 13: Jan 22 |
Dividend payments under
asymmetric
information Dividends - ppt |
Bhattacharya,
Bell Journal 1979 Bernheim and Wantz, AER 1995 |
|
|
|
|
Brander
and Lewis, AER 1986 |
|
|
|
Capital structure and the
market
for corporate control Corporate control - ppt |
Topic
6:
Capital structure and the market for corporate control
Grossman
and Hart, Bell Journal 1980 |
|
|
|
| * An important remark: the plan for the course is only tentative. It is very likely that during the semester some changes and adjustments will have to be made. |
| Last updated: Sunday, january 29, 2012 |