![](/system/application/views/ar/common/assets/img/loading-ver-7e99e1159a3686f6aa4f90043c554483.gif)
Loading
Monday 21 October 2024 at 13:00 to Tuesday 17 December 2024 at 16:15
Monday 9 September 2024 at 23:55
Room TBA,
Campus TBA,
2000 Frederiksberg
Room TBA
Campus TBA
2000 Frederiksberg
Faculty
Course content
The course will, among other topics, cover classical Modigliani-Miller propositions, agency conflicts, signaling models, taxes, payout policy, and dynamic capital structure models.
Teaching style
44 lectures including discussions of exercises and student presentations. The lectures will mainly be based on research papers.
The exercises and student presentations include the following elements:
Students must pass the written assignments and the presentations before they are allowed to take the final exam.
Readings
The lectures will mainly be based on research papers. Some parts will be based on chapters from Tirole (2006). In some cases, it may be convenient to consult a textbook such as Berk and deMarzo (2019) – or a newer version of the textbook. All material on the reading list below will be handed out electronically except the background and supplementary readings.
Exam
The course ends with a final oral exam. The student draws a paper/topic from the curriculum. The student then has 20 minutes to prepare an oral presentation of the paper/topic on the white/blackboard. The examination lasts 20 minutes including the time the examiners need to determine the grade and communicate it to the student. The examination begins with the student giving the prepared presentation in front of the examiners for 10-15 minutes, possibly interrupted by clarifying questions by the examiners. Towards the end of the exam, the examiners will normally have supplementary questions related to other papers/topics from the curriculum.
Time and place
The lectures will take place in 11 sessions:
Session, Date, time and place |
Topic |
Faculty |
1. Monday Oct. 21, 13:00-16:15 SP D4.20 |
Classical capital structure theory I |
Carsten Sørensen |
2. Monday Oct. 28, 13:00-16:15 SP D4 (Augustinusfonden) |
Classical capital structure theory II |
Carsten Sørensen |
3. Thursday Nov. 7, 9:00-12:15 SP D4.39 |
Agency problems and asymmetric information I |
Carsten Sørensen |
4. Monday Nov. 11, 13:00-16:15 SP D4.20 |
Agency problems and asymmetric information II |
Carsten Sørensen |
5. Monday Nov. 18, 13:00-16:15 SP D4.20 |
Payout policy |
Carsten Sørensen |
6. Thursday Nov. 21, 13:00-16:15 SP D4.20 |
Analyzing capital structure using the Merton model |
David Lando |
7. Tuesday Nov. 26, 13:00-16:15 in SP D4.20 |
Bank capital structure and capital regulation |
David Lando |
8. Tuesday Dec. 3, 13:00-16:15 SP D4.20 |
Securitization |
David Lando |
9. Thursday Dec. 5, 13:00-16:15 SP D4.20 |
Dyn. cap. structure models (one layer of debt) and real options |
Kristian Miltersen |
10. Tuesday Dec. 10, 13:00-16:15 SP D4.20 |
Dynamic capital structure models (multiple layers of debt I) |
Kristian Miltersen |
11. Tuesday Dec. 17, 13:00-16:15 SP D4.20 |
Dynamic capital structure models (multiple layers of debt II) |
Kristian Miltersen |
Tentative reading list
(* denotes papers that will be explicitly used during classes, the others are background reading.)
General References
Berk, J. B. and P. DeMarzo (2019): Corporate Finance, Pearson, 5th ed.
Dixit, A. and R. Pindyck (1994): Investment under uncertainty, Princeton University Press.
Tirole, Jean (2006). The Theory of Corporate Finance, Princeton University Press, chapters 3, 4, and 6. (120 pages).
Lando, David: Lecture notes.
Capital Structure
*Admati, A. R., P. M. DeMarzo, M. F. Hellwig, and P. Pfleiderer (2018): “The leverage ratchet effect,” Journal of Finance, 73, 145–198.
Akerlof, G. A. (1970): “The market for “lemons”: Quality uncertainty and the market mechanism,” Quarterly Journal of Economics, 84, 488–500.
Alderson, M. J. and B. L. Betker (1999): “Assessing post-bankruptcy performance: An analysis of reorganized firms’ cash flows,” Financial Management, 28, 68–82.
*Amaro de Matos, João (2001). Theoretical Foundations of Corporate Finance, Oxford University Press, chapter 2, pp. 39-58.
Andrade, G. and S. N. Kaplan (1998): “How costly is financial (not economic) distress? Evidence from highly leveraged transactions that became distressed,” Journal of Finance, 53, 1443–1493.
Baker, M. and J. Wurgler (2002): “Market timing and capital structure,” Journal of Finance, 57, 1–32.
*Berens, James I. and Charles J. Cuny (1995). ”The Capital Structure Puzzle Revisited”, Review of Financial Studies, 8, 1185-1208.
Black, F. and J. C. Cox (1976): “Valuing corporate securities: Some effects of bond indenture provisions,” Journal of Finance, 31, 351–367.
Bradley, M., G. A. Jarrell, and E. H. Kim (1984): “On the existence of an optimal capital structure: Theory and evidence,” Journal of Finance, 39, 857–878.
Byoun, S. (2008): “How and when do firms adjust their capital structure toward targets?”
Journal of Finance, 63, 3069–3096.
Childs, P. D., D. C. Mauer, and S. H. Ott (2005): “Interactions of corporate financing and investment decisions: The effects of agency conflicts,” Journal of Financial Economics, 76, 667–690.
Chirinko, R. S. and A. R. Singha (2000): “Testing static tradeoff against pecking order models of capital structure: A critical comment,” Journal of Financial Economics, 58, 417– 425.
Cho, I.-K. and D. M. Kreps (1987): “Signaling games and stable equilibria,” Quarterly Journal of Economics, 102, 179–221.
*DeAngelo, Harry and Ronald W. Masulis (1980): “Optimal Capital Structure under Corporate and Personal Taxation”, Journal of Financial Economics, 8, 3-29.
Della Seta, M., E. Morellec, and F. Zucchi (2020): “Short-term debt and incentives for risk-taking,” Journal of Financial Economics, 137, 179–203.
DeMarzo, Peter M. (1988). “An Extension of the Modigliani-Miller Theorem to Stochastic Economies with Incomplete Markets and Interdependent Securities”, Journal of Economic Theory, 45, 353-369.
DeMarzo, P. M. and Z. He (2021): “Leverage dynamics without commitment,” Journal of Finance, 76, 1195–1250.
DeMarzo, P. M., Z. He, and F. Tourre (2020): “Sovereign debt ratchets and welfare destruction,” Working paper.
Diamond, Douglas W. (2007): “Banks and Liquidity Creation: “A Simple Exposition of the Diamond-Dybvig Model”, Economics Quarterly, 93, (2), pp 189-200.
Dumas, B. (1992): “Super contact and related optimality conditions,” Journal of Economic Dynamics and Control, 15, 675–685.
Faccio, M. and J. Xu (2015): “Taxes and capital structure,” Journal of Financial and Quantitative Analysis, 50, 227–300.
Fama, E. F. and K. R. French (2002): “Testing trade-off and pecking order predictions about dividends and debt,” Review of Financial Studies, 15, 1–33.
Frank, M. Z. and V. K. Goyal (2003): “Testing the pecking order theory of capital structure,”
Journal of Financial Economics, 67, 217–248.
——— (2009): “Capital structure decisions: Which factors are reliably important?” Financial Management, 1–37.
Fulghieri, P., D. Garcia, and D. Hackbarth (2020): “Asymmetric information and the pecking (dis)order,” Review of Finance, 961–996.
Glover, B. (2016): “The expected cost of default,” Journal of Financial Economics, 119, 284– 299.
*Graham, J. R. (2000): “How big are the tax benefits of debt?” Journal of Finance, 55, 1901–1955.
Grinblatt, M. and S. Titman: “How taxes affect financing choices”, Financial Markets and Corporate Strategy, ch. 14, McGraw-Hill, 2nd edition.
Harris, M. and A. Raviv (1991): “The theory of capital structure,” Journal of Finance, 46, 297–355.
*Jensen, M. C. and W. H. Meckling (1976): “Theory of the firm: Managerial behavior, agency costs and ownership structure,” Journal of Financial Economics, 3, 305–360.
Johnson, S., R. La Porta, F. L. de Silanes, and A. Shleifer (2000): “Tunneling,”
American Economic Review, 90, 22–27.
Leary, M. T. and M. R. Roberts (2005): “Do firms rebalance their capital structures?”
Journal of Finance, 60, 209–231.
——— (2010): “The pecking order, debt capacity, and information asymmetry,” Journal of Financial Economics, 95, 332–355.
*Kreps, David M. (1990). ”Adverse selection and market signaling”, A Course in Microeconomic Theory, Princeton, ch. 17, pp. 625-660,
Leland, H. E. (1994): “Corporate debt value, bond covenants, and optimal capital structure,”
Journal of Finance, 49, 1213–1252.
Leland, H. E. and D. H. Pyle (1977): “Informational asymmetries, financial structure, and financial intermediation,” Journal of Finance, 32, 371–387.
Merton, R. C. (1974): “On the pricing of corporate debt: The risk structure of interest rates,”
Journal of Finance, 29, 449–470.
Merton, Robert C. (1977), “An analytic derivation of the cost of deposit insurance and loan guarantees: An application of modern option pricing theory”, Journal of Banking and Finance, Volume 1, Issue 1, pp. 3-11.
*Miller, M. H. (1977): “Debt and taxes,” Journal of Finance, 32, 261–275.
Miller, M.H. (1995). “Do the MM propositions apply to banks?” Journal of Banking and Finance. 19 (3). p.483-489.
Modigliani, F. and M. H. Miller (1958): “The cost of capital, corporation finance, and the theory of investment,” American Economic Review, 48, 261–297.
Modigliani, Franco and Merton H. Miller (1963). “Corporate Income Taxes and the Cost of Capital: A Correction”, American Economic Review, 53, 433-443.
*Myers, S. C. (1977): “Determinants of corporate borrowing,” Journal of Financial Economics, 5, 147–175.
——— (1984): “The capital structure puzzle,” Journal of Finance, 34, 575–592.
——— (1993): “Still searching for optimal capital structure,” Journal of Applied Corporate Finance, 6, 3–14.
*Myers, S. C. and N. S. Majluf (1984): “Corporate financing and investment decisions when firms have information that investors do not have,” Journal of Financial Economics, 13, 187–221.
Rajan, R. G. and L. Zingales (1995): “What do we know about capital structure? Some evidence from international data,” Journal of Finance, 50, 1421–1460.
*Ross, S. A. (1977): “The determination of financial structure: The incentive-signaling approach,” Bell Journal of Economics, 8, 23–40.
Shyam-Sunder, L. and S. C. Myers (1999): “Testing static tradeoff against pecking order models of capital structure,” Journal of Financial Economics, 51, 219–244.
Spence, M. (1973): “Job market signaling,” Quarterly Journal of Economics, 87, 355–374.
Stein, J. C. (1992): “Convertible bonds as backdoor equity financing,” Journal of Financial Economics, 32, 3–21.
*Stiglitz, Joseph (1974). “On the Irrelevance of Corporate Financial Policy”, The American Economic Review, 47, 851-866.
*Strebulaev, I. A. (2007): “Do tests of capital structure theory mean what they say?” Journal of Finance, 62, 1747–1787.
Strebulaev, I. A. and T. M. Whited (2013): “Dynamic corporate finance is useful: A comment on Welch (2013),” Critical Finance Review, 2, 173–191.
Warner, J. B. (1977): “Bankruptcy costs: Some evidence,” Journal of Finance, 32, 337–347.
Welch, I. (2004): “Capital structure and stock returns,” Journal of Political Economy, 112, 106–131.
——— (2013): “A critique of recent quantitative and deep-structure modeling in capital structure research and beyond,” Critical Finance Review, 2, 131–171.
Payout policy
Allen, F., A. E. Bernardo, and I. Welch (2000): “A theory of dividends based on tax clienteles,” Journal of Finance, 55, 2499–2536.
*Baker, M., B. Mendel, and J. Wurgler (2016): “Dividends as reference points: A behavioral signaling approach,” Review of Financial Studies, 29, 697–738.
Baker, M. and J. Wurgler (2004): “A catering theory of dividends,” Journal of Finance, 59, 1125–1165.
Black, F. (1976): “The dividend puzzle,” Journal of Portfolio Management, 2, 5–8.
Black, F. and M. Scholes (1974): “The effects of dividend yield and dividend policy on common stock prices and returns,” Journal of Financial Economics, 2, 1–22.
Brav, A., J. R. Graham, C. R. Harvey, and R. Michaely (2005): “Payout policy in the 21st century,” Journal of Financial Economics, 77, 483–527.
Chay, J. and J. Suh (2009): “Payout policy and cash-flow uncertainty,” Journal of Financial Economics, 93, 88–107.
DeAngelo, H., L. DeAngelo, and D. J. Skinner (2004): “Are dividends disappearing? Dividend concentration and the consolidation of earnings,” Journal of Financial Economics, 72, 425–456.
DeAngelo, H., L. DeAngelo, and R. M. Stulz (2006): “Dividend policy and the earned/contributed capital mix: a test of the life-cycle theory,” Journal of Financial Economics, 81, 227–254.
Fama, E. F. and K. R. French (2001): “Disappearing dividends: Changing firm characteristics or lower propensity to pay?” Journal of Financial Economics, 60, 3–43.
——— (2002): “Testing trade-off and pecking order predictions about dividends and debt,”
Review of Financial Studies, 15, 1–33.
*Floyd, E., N. Li, and D. J. Skinner (2015): “Payout policy through the financial crisis: The growth of repurchases and the resilience of dividends,” The Journal of Finance, 44, 19–40.
Grullon, G. and R. Michaely (2002): “Dividends, share repurchases, and the substitution hypothesis,” Journal of Finance, 59, 651–680.
——— (2004): “The information content of share repurchase programs,” Journal of Finance, 57, 1649–1684.
Hanlon, M. and J. L. Hoopes (2014): “What do firms do when dividend tax rates change? An examination of alternative payout responses,” Journal of Financial Economics, 114, 105–124.
Ikenberry, D., J. Lakonishok, and T. Vermaelen (1995): “Market underreaction to open market share repurchase,” Journal of Financial Economics, 39, 181–208.
Jagannathan, M., C. Stevens, and M. Weisbach (2000): “Financial flexibility and the choice between dividends and share repurchases,” Journal of Financial Economics, 57, 355–384.
*Lambrecht, B. M. and S. C. Myers (2012): “A Lintner model of payout and managerial rents,” Journal of Finance, 67, 1761-1810.
*Leary, M. T. and R. Michaely (2011): “Determinants of dividend smoothing: Empirical evidence,” Review of Financial Studies, 24, 3197–3249.
Lintner, J. (1956): “Distribution of incomes of corporations among dividends, retained earnings, and taxes,” American Economic Review, 46, 97–113.
Miller, M. H. and F. Modigliani (1961): “Dividend policy, growth, and the valuation of shares,” Journal of Business, 34, 411–433.
*Miller, M. H. and K. Rock (1985): “Dividend policy under asymmetric information,” Journal of Finance, 11, 1031–1051.
Corporate Liquidity Management
Acharya, V., H. Almeida, and M. Campello (2013): “Aggregate risk and the choice between cash and lines of credit,” Journal of Finance, 68, 2059–2116.
Almeida, H., M. Campello, and M. M. Weisbach (2004): “The cash flow sensitivity of cash,” Journal of Finance, 59, 1777–1804.
Anderson, R. W. and A. Carverhill (2012): “Corporate liquidity and capital structure,”
Review of Financial Studies, 25, 797–837.
Azar, J. A., J.-F. Kagy, and M. C. Schmalz (2016): “Can changes in the cost of carry explain the dynamics of corporate “cash” holdings?” Review of Financial Studies, 29, 2194–2240.
Bakke, T.-E. and T. Gu (2017): “Diversification and cash dynamics,” Journal of Financial Economics, 123, 580–601.
Bates, T. W., K. M. Kahle, and R. M. Stulz (2009): “Why do U.S. firms hold so much more cash than they used to?” Journal of Finance, 64, 1985–2021.
Bolton, P., H. Chen, and N. Wang (2011): “A unified theory of Tobin’s q, corporate investment, financing, and risk management,” Journal of Finance, 66, 1545–1578.
——— (2014): “Debt, taxes, and liquidity,” Working paper.
Campello, M., E. Giambona, J. R. Graham, and C. R. Harvey (2011): “Liquidity management and corporate investment during a financial crisis,” Review of Financial Studies, 24, 1944–1979.
Chang, X., S. Dasgupta, G. Wong, and J. Yao (2014): “Cash-flow sensitivities and the allocation of internal cash flow,” Review of Financial Studies, 27, 3628–3657.
DeAngelo, H., L. DeAngelo, and R. M. Stulz (2006): “Dividend policy and the earned/contributed capital mix: a test of the life-cycle theory,” Journal of Financial Economics, 81, 227–254.
De´camps, J.-P., S. Gryglewicz, E. Morellec, and S. Villeneuve (forthcoming): “Corporate policies with permanent and transitory shocks,” Review of Financial Studies.
De´camps, J.-P., T. Mariotti, J.-C. Rochet, and S. Villeneuve (2011): “Free cash flow, issuance costs, and stock prices,” Journal of Finance, 66, 1501–1544.
De´camps, J.-P. and S. Villeneuve (2007): “Optimal dividend policy and growth option,”
Finance and Stochastics, 11, 3–27.
Faulkender, M. and R. Wang (2006): “Corporate financial policy and the value of cash,”
Journal of Finance, 61, 1957–1990.
Foley, C. F., J. C. Hartzell, S. Titman, and G. Twite (2007): “Why do firms hold so much cash? A tax-based explanation,” Journal of Financial Economics, 86, 579–607.
Gamba, A. and A. Triantis (2008): “The value of financial flexibility,” Journal of Finance, 63, 2263–2296.
*Graham, J. R. and M. Leary (2018): “The evolution of corporate cash,” Review of Financial Studies, 31, 4288–4344.
*Gryglewicz, S. (2011): “A theory of corporate financial decisions with liquidity and solvency concerns,” Journal of Financial Economics, 99, 365–384.
Gryglewicz, S., L. Mancini, E. Morellec, E. Schroth, and P. Valta (2019): “Cash flow shocks and corporate liquidity,” Working paper.
Hanlon, M., E. L. Maydew, and D. Saavedra (2017): “The taxman cometh: Does tax uncertainty affect corporate cash holdings?” Review of Accounting Studies, 22, 1198–1228.
Hennessy, C. A. and T. M. Whited (2005): “Debt dynamics,” Journal of Finance, 60, 1129–1165.
——— (2007): “How costly is external financing? Evidence from a structural estimation,” Journal of Finance, 62, 1705–1745.
Hugonnier, J., S. Malamud, and E. Morellec (2015): “Capital supply uncertainty, cash holdings, and investment,” Review of Financial Studies, 28, 391–445.
Jeanblanc-Picque´, M. and A. Shiryaev (1995): “Optimization of the flow of dividends,”
Russian Mathematical Surveys, 50, 257–277.
Lins, K. V., H. Servaes, and P. Tufano (2010): “What drives corporate liquidity? An international survey of cash holdings and lines of credit,” Journal of Financial Economics, 98, 160–176.
*Opler, T., L. Pinkowitz, R. M. Stulz, and R. Williamson (1999): “The determinants and implications of corporate cash holdings,” Journal of Financial Economics, 52, 3–46.
Pinkowitz, L., R. M. Stulz, and R. Williamson (2006): “Does the contribution of corporate cash holdings and dividends to firm value depend on governance? A cross-country analysis,” Journal of Finance, 61, 2725–2751.
——— (2016): “Do U.S. firms hold more cash than foreign firms do?” Review of Financial Studies, 29, 309–348.
Riddick, L. A. and T. M. Whited (2009): “The corporate propensity to save,” Journal of Finance, 64, 1729–1766.
Investment
Acharya, V., H. Almeida, and M. Campello (2013): “Aggregate risk and the choice between cash and lines of credit,” Journal of Finance, 68, 2059–2116.
Almeida, H., M. Campello, and M. M. Weisbach (2004): “The cash flow sensitivity of cash,” Journal of Finance, 59, 1777–1804.
Anderson, R. W. and A. Carverhill (2012): “Corporate liquidity and capital structure,”
Review of Financial Studies, 25, 797–837.
Azar, J. A., J.-F. Kagy, and M. C. Schmalz (2016): “Can changes in the cost of carry explain the dynamics of corporate “cash” holdings?” Review of Financial Studies, 29, 2194–2240.
Bakke, T.-E. and T. Gu (2017): “Diversification and cash dynamics,” Journal of Financial Economics, 123, 580–601.
Bates, T. W., K. M. Kahle, and R. M. Stulz (2009): “Why do U.S. firms hold so much more cash than they used to?” Journal of Finance, 64, 1985–2021.
Bolton, P., H. Chen, and N. Wang (2011): “A unified theory of Tobin’s q, corporate investment, financing, and risk management,” Journal of Finance, 66, 1545–1578.
——— (2014): “Debt, taxes, and liquidity,” Working paper.
Campello, M., E. Giambona, J. R. Graham, and C. R. Harvey (2011): “Liquidity management and corporate investment during a financial crisis,” Review of Financial Studies, 24, 1944–1979.
Chang, X., S. Dasgupta, G. Wong, and J. Yao (2014): “Cash-flow sensitivities and the allocation of internal cash flow,” Review of Financial Studies, 27, 3628–3657.
DeAngelo, H., L. DeAngelo, and R. M. Stulz (2006): “Dividend policy and the earned/contributed capital mix: a test of the life-cycle theory,” Journal of Financial Economics, 81, 227–254.
De´camps, J.-P., S. Gryglewicz, E. Morellec, and S. Villeneuve (forthcoming): “Corporate policies with permanent and transitory shocks,” Review of Financial Studies.
De´camps, J.-P., T. Mariotti, J.-C. Rochet, and S. Villeneuve (2011): “Free cash flow, issuance costs, and stock prices,” Journal of Finance, 66, 1501–1544.
De´camps, J.-P. and S. Villeneuve (2007): “Optimal dividend policy and growth option,”
Finance and Stochastics, 11, 3–27.
Faulkender, M. and R. Wang (2006): “Corporate financial policy and the value of cash,”
Journal of Finance, 61, 1957–1990.
Foley, C. F., J. C. Hartzell, S. Titman, and G. Twite (2007): “Why do firms hold so much cash? A tax-based explanation,” Journal of Financial Economics, 86, 579–607.
Gamba, A. and A. Triantis (2008): “The value of financial flexibility,” Journal of Finance, 63, 2263–2296.
*Graham, J. R. and M. Leary (2018): “The evolution of corporate cash,” Review of Financial Studies, 31, 4288–4344.
*Gryglewicz, S. (2011): “A theory of corporate financial decisions with liquidity and solvency concerns,” Journal of Financial Economics, 99, 365–384.
Gryglewicz, S., L. Mancini, E. Morellec, E. Schroth, and P. Valta (2019): “Cash flow shocks and corporate liquidity,” Working paper.
Hanlon, M., E. L. Maydew, and D. Saavedra (2017): “The taxman cometh: Does tax uncertainty affect corporate cash holdings?” Review of Accounting Studies, 22, 1198–1228.
Hennessy, C. A. and T. M. Whited (2005): “Debt dynamics,” Journal of Finance, 60, 1129–1165.
——— (2007): “How costly is external financing? Evidence from a structural estimation,” Journal of Finance, 62, 1705–1745.
Hugonnier, J., S. Malamud, and E. Morellec (2015): “Capital supply uncertainty, cash holdings, and investment,” Review of Financial Studies, 28, 391–445.
Jeanblanc-Picque´, M. and A. Shiryaev (1995): “Optimization of the flow of dividends,”
Russian Mathematical Surveys, 50, 257–277.
Lins, K. V., H. Servaes, and P. Tufano (2010): “What drives corporate liquidity? An international survey of cash holdings and lines of credit,” Journal of Financial Economics, 98, 160–176.
*Opler, T., L. Pinkowitz, R. M. Stulz, and R. Williamson (1999): “The determinants and implications of corporate cash holdings,” Journal of Financial Economics, 52, 3–46.
Pinkowitz, L., R. M. Stulz, and R. Williamson (2006): “Does the contribution of corporate cash holdings and dividends to firm value depend on governance? A cross-country analysis,” Journal of Finance, 61, 2725–2751.
——— (2016): “Do U.S. firms hold more cash than foreign firms do?” Review of Financial Studies, 29, 309–348.
Riddick, L. A. and T. M. Whited (2009): “The corporate propensity to save,” Journal of Finance, 64, 1729–1766.
Manager-shareholder agency confilicts and executive compensation
Baranchuk, N., R. Kieschnick, and R. Moussawi (2014): “Motivating innovation in newly public firms,” Journal of Financial Economics, 111, 578–588.
Coles, J. L., N. D. Daniel, and L. Naveen (2006): “Managerial incentives and risk-taking,”
Journal of Financial Economics, 79, 431–468.
DeMarzo, P. M., M. J. Fishman, Z. He, and N. Wang (2012): “Dynamic agency and the q theory of investment,” Journal of Finance, 67, 2295–2340.
DeMarzo, P. M. and Y. Sannikov (2006): “Optimal security design and dynamic capital structure in a continuous-time agency model,” Journal of Finance, 61, 2681–2724.
Dittmann, I., E. Maug, and O. Spalt (2010): “Sticks or carrots? Optimal CEO compensation when managers are loss averse,” Journal of Finance, 65, 2015–2050.
Grossman, S. J. and O. D. Hart (1983): “An analysis of the principal-agent problem,”
Econometrica, 51, 7–45.
*Hoffmann, F. and S. Pfeil (2010): “Reward for luck in a dynamic agency model,” Review of Financial Studies, 23, 3329–3345.
Jensen, M. C. (1986): “Agency costs of free cash flow, corporate finance, and takeovers,”
American Economic Review, 76, 323–329.
Jensen, M. C. and W. H. Meckling (1976): “Theory of the firm: Managerial behavior, agency costs and ownership structure,” Journal of Financial Economics, 3, 305–360.
*John, T. A. and K. John (1993): “Top-management compensation and capital structure,”
Journal of Finance, 48, 949–974.
Johnson, S., R. La Porta, F. L. de Silanes, and A. Shleifer (2000): “Tunneling,”
American Economic Review, 90, 22–27.
Levy, A. and C. Hennessy (2007): “Why does capital structure choice vary with macroeconomic conditions?” Journal of Monetary Economics, 54, 1545–1564.
Malmendier, U. and G. Tate (2005): “CEO overconfidence and corporate investment,” Journal of Finance, 60, 2661–2700.
Manso, G. (2011): “Motivating innovation,” Journal of Finance, 66, 1823–1860.
Mayer, S. (2021): “Financing breakthroughs under failure risk,” Working paper.
Morellec, E. (2004): “Can managerial discretion explain observed leverage ratios?” Review of Financial Studies, 17, 257–294.
Morellec, E., B. Nikolov, and N. Schu¨rhoff (2012): “Corporate governance and capital structure dynamics,” Journal of Finance, 67, 801–847.
Nikolov, B. and T. M. Whited (2014): “Agency conflicts and cash: Estimates from a structural model,” Journal of Finance, 69, 1883–1921.
Stulz, R. M. (1990): “Managerial discretion and optimal financing policies,” Journal of Financial Economics, 26, 3–27.
Varas, F. (1973): “Managerial short-termism, turnover policy, and the dynamics of incentives,”
Quarterly Journal of Economics, 87, 355–374.
*Yermack, D. (2006): “Flights of fancy: Corporate jets, CEO perquisites, and inferior shareholder returns,” Journal of Financial Economics, 80, 211–242.
Corporate finance and macroeconomic conditions
Arnold, M., A. F. Wagner, and R. Westermann (2013): “Growth options, macroeconomic conditions, and the cross-section of credit risk,” Journal of Financial Economics, 107, 350–385.
Bhamra, H. S., L.-A. Kuehn, and I. A. Strebulaev (2010a): “The aggregate dynamics of capital structure and macroeconomic risk,” Review of Financial Studies, 23, 4187–4241.
——— (2010b): “The levered equity risk premium and credit spreads: A unified framework,”
Review of Financial Studies, 23, 645–703.
Chen, H. (2010): “Macroeconomic conditions and the puzzles of credit spreads and capital structure,” Journal of Finance, 65, 2171–2212.
Hackbarth, D., J. Miao, and E. Morellec (2006): “Capital structure, credit risk, and macroeconomic conditions,” Journal of Financial Economics, 82, 519–550.
*Halling, M., J. Yu, and J. Zechner (2016): “Leverage dynamics over the business cycle,”
Journal of Financial Economics, 122, 21–41.
Korajczyk, R. A. and A. Levy (2003): “Capital structure choice: Macroeconomic conditions and financial constraints,” Journal of Financial Economics, 68, 75–109.
Levy, A. and C. Hennessy (2007): “Why does capital structure choice vary with macroeconomic conditions?” Journal of Monetary Economics, 54, 1545–1564.
Westermann, R. (2018): “Measuring agency costs over the business cycle,” Management Science, 64, 5748–5768.
Corporate finance and banking
Berg, T. and J. Gider (2017): “What explains the difference in leverage between banks and nonbanks?” Journal of Financial and Quantitative Analysis, 52, 2677–2702.
*Gornall, W. and I. S. Strebulaev (2018): “Financing as a supply chain: The capital structure of banks and borrowers,” Journal of Financial Economics, 129, 510–530.
*Schepens, G. (2016): “Taxes and bank capital structure,” Journal of Financial Economics, 120, 585–600.
Green corporate finance
Acemoglu, D., U. Akcigit, D. Hanley, and W. Kerr (2016): “Transition to clean energy,”
Journal of Political Economy, 124, 52–104.
Albuquerque, R., Y. Koskinen, and C. Zhang (2020): “Corporate social responsibility and firm risk: Theory and empirical evidence,” Management Science, 65, 4451–4469.
*Flammer, C. (forthcoming): “Corporate green bonds,” Journal of Financial Economics.
Gillan, S. L., A. Koch, and L. T. Starks (2021): “Firms and social responsibility: A review of ESG and CSR research in corporate finance,” Journal of Corporate Finance, 66.
Golosov, M., J. Hassler, P. Krusell, and A. Tsyvinski (2014): “Optimal taxes on fossil fuel in general equilibrium,” Econometrica, 82, 41–88.
Heinkel, R., A. Kraus, and J. Zechner (2001): “The effect of green investment on corporate behavior,” Journal of Financial and Quantitative Analysis, 36, 431–449.
Hong, H. and M. Kacperczyk (2009): “The price of sin: The effects of social norms on markets,” Journal of Financial Economics, 93, 15–36.
Kru¨ger, P. (2015): “Corporate goodness and shareholder wealth,” Journal of Financial Eco- nomics, 115, 304–329.
Liang, H. and L. Renneboog (2017): “On the foundations of corporate social responsibility,”
Journal of Finance, 122, 853–910.
Oehmke, M. and M. Opp (2020): “A theory of socially responsible investment,” Working paper.
Current top publications (selected by students who took the course last time):
*Kaviani, M. S., L. Kryzanowski, H. Maleki, and P. Savor (2020): “Policy uncertainty and corporate credit spreads,” Journal of Financial Economics, 138, 838–865.
*Li, Y. and S. Mayer (2021): “Money creation in decentralized finance: A dynamic model of stablecoin and crypto shadow banking,” Working paper.
*Matray, A. (2021): “The local innovation spillovers of listed firms,” Journal of Financial Economics, 141, 395–412.
*Nyborg, K. G. and Z. Wang (2021): “The effect of stock liquidity on cash holdings: The repurchase motive,” Journal of Financial Economics, 142, 905–927.
Publication and related
Berk, J. B., C. R. Harvey, and D. Hirshleifer (2017): “How to write an effective referee report and improve the scientific review process,” Journal of Economic Perspectives, 31, 231–44.
Cochrane, J. H. (2005): “Writing tips for Ph. D. students,” Working paper, available at author’s webpage.
Pedersen, L. H. (2011): “How to succeed in academia,” Slides, available at author’s webpage.
Varian, H. (1994): “How to build an economic model in your spare time,” Available at author’s webpage.
Registration Deadline and Conditions
The registration deadline is 9 September 2024. If you wish to cancel your registration, it must be done by this date. By this deadline, we determine whether there are enough registrations to run the course or decide who should be offered a seat if we have received too many registrations.
Click to view the event location on Google Maps >
CBS PhD School
Bente Ramovic
Phone: +45 3815 3138
bsr.research@cbs.dk
CBS PhD School
Bente Ramovic
Phone: +45 3815 3138
bsr.research@cbs.dk