Financial markets and Corporate Finance
Instructor: Dr. Kyojik “Roy” Song
Office: Business School Building #308
Tel.: 760-0497
Email: roysong@skku.edu
Office hours: M 17:00-18:00, W 14:00-15:00 or by appointment
Course website: i-campus
Aims and Objectives:
The goal of this graduate level course is to provide an introduction into current theoretical
research in corporate finance and financial markets, covering a broad range of topics. Special
attention will be paid to developing research idea in this field. Students will also have a chance
to practice written and oral presentation of their research ideas.
The course focuses on fundamental themes in the area of corporate finance and banking both
in a local and an international setting including: the analysis of cross-border investments,
mergers and acquisitions, take-over battles and defenses, governance, leverage buyouts (LBOs),
project finance, corporate restructuring, companies in financial distress and bank merger
valuations.
We also examine financial issues in emerging markets. We specifically focus on the governance,
internal markets, and M&As related to business groups in emerging markets. The in-depth
analysis of these issues might lead the students to develop their own research topics.
The course is also structured to introduce students to research methods and analytical skills in
finance. We will go over the method to use financial data sets, statistical skills to handle the
data, and the topics to write a good thesis.
Readings and Materials: Refer to the following materials
Financial Markets and Corporate Strategy by Hillier, Grinblatt and Titman, (Second
European Edition)/재무관리의 이해, 3판, 신영사(2021)
This course covers material that is at the frontier of knowledge in a research field of corporate
finance and financial institutions. To cover the recent research, we will read an article each
week (these articles are assigned in the schedule).
Recommended additional materials: A Guide to Econometrics by Kennedy
SAS/STATA manual, R
Wall Street Journal
Databases available at SKKU: WRDS (CRSP, Research Insight, etc.), SDC New Issues/M&A, Datastream,
Worldscope, Other Korean databases
Course expectations:
The student will develop the understanding of the basic theory, the recent research, and the research methodology
in the field of corporate finance and financial institution. Because this is a graduate level course, active and
frequent participation is demanded of all students. You should have read assigned papers thoroughly prior to class,
and will be assigned to criticize the papers. A consistent lack of preparation might lead to a failure in the class.
Grading:
Exams: 50%
Term paper: 25%
In-class presentations, discussion, and assignment: 25%
Term paper:
The paper proposal is to prepare for writing a thesis in the master program. You need to select one research idea
in corporate finance area, review literature, and develop hypotheses. Before the final exam, you will present the
research idea in the class.
Reference for Event studies
Brown and Warner, 1985, Using daily stock returns: the case of event studies, JFE 14-1, 3-31.
Salinger, 1992, Standard errors in event studies, JFQA 27-1, 39-53
Tentative schedule
첫3주 학부 리뷰
논문 idea 발전 시켜야 함…어려움…
IPO 어떻게 하는지, 전략은 뭔지 등 다룰 예정.
2010-2019 채권 발행 량이 많아짐.
PER높은 IPO 많아짐, 청약 많아지고 주식 팔기가 쉬워짐.
요즘 2000년대 초와 비슷 함.
Capital structure 결정 요인이 뭔지 등.
배당정책: 배당을 하면 시장이 어떻게 반응? 어떤 회사가 배당 하고, 어떤 회사는 안할가?
국가별 차이도 있음.
80년 대부터 대기업일수록 현 작음, 일본 은행들 미국 진출, 법을 바꿔서 다른 주에서도 영업 할
수 있게. 시티뱅크 등 커지기 시작. 다른주의 작은 기업을 m&a
주제 중에 하나 골라서 주제를 발전. Eg. 가설 test 하는 term paper.
1) 논문 발표
2) 시험
3) Term paper
Week
Materials covered
Feb 22
Introduction
The theory and practice of capital structure
The theory and practice of capital structure
Firm valuation
Graham et al.,2015, A century of capital structure: the leveraging
of corporate America, JFE 118, 658-683
Firm valuation
Private equity (Buyout fund)
Kahle and Stulz, 2017, Is the US public corporation in trouble?
Journal of Economic perspectives 31, 67-88.
Private equity (Venture capital)
Information asymmetry
Akerlof, 1970, The Market for lemons: quality uncertainty and
the market mechanism, QJE 84-3, 488-500
Myers and Majluf, 1984, Corporate financing and investment
decisions when firms have information that investors do not
have, Journal of Financial Economics 13, 187-221.
Investment banking and equity financing
Investment banking and equity financing
Beatty and Ritter, 1986, Investment banking, reputation, and the
underpricing of IPOs, JFE 15, 213-232.
Bharath and Dittmar, 2010, Why do firms use private equity to
opt out of public markets? RFS 23, 1771-1818.
Doidge et al., 2017, The US listing gap, JFE 123, 464-87
Agency theory
Jensen, 1986, Agency costs of free cash flow, corporate finance,
and takeovers, AER 76-2, 323-329.
Debt financing
Hovakimian et al., 2001, The debt-equity choice, JFQA
Banking
Denis and Mihov, 2003, The choice among bank debt, non-bank
private debt, and public debt: evidence from new corporate
borrowings, JFE
Empirical findings on capitals structure
Lemmon, Roberts, and Zender, 2008, Back to the beginning:
persistence and the cross-section of corporate capital structure,
JF63-4, 1575-1608
Shyam-Sunder and Myers, 1999, Testing static tradeoff against
pecking order models of capital structure, Journal of Financial
Economics 51, 219-244.
Faulkender, Flannery, Hankins, and Smith, 2012, Cash flows and
leverage adjustment, Journal of Financial Economics 103, 632646.
Mar 1
Mar 8
Mar 15
Mar 22
Mar 29
Apr 5
Apr 12
Apr 19
Apr 26
Payout policy
LLSV, 2000, Agency problems and dividend policies around the
Reading
Assignments
(text book)
Case study:
Seagate
May 3
May 10
May 17
May 24
May 31
world, JF 55-1, 1-33
M&A
Bradley, M., A. Desai and E. H. Kim (1988), ‘Synergistic
Gains from Corporate Acquisitions and Their Division Between
the Stockholders of Target and Acquiring Firms, Journal of
Financial Economics, Vol. 21, pp. 3–40.
Erik, Kadapakkam, and Krishnamurthy (2009), How Do
Mergers Create Value? A Comparison of Taxes, Market Power,
and Efficiency Improvements as Explanations for Synergies,
RFS 22, 1179-1211
Exam
Corporate governance
GIM, 2003, Corporate governance and equity prices, QJE 118-1,
107-155
Business groups
Khanna, T. and Yafeh, Y., 2007, Business groups in emerging
markets: Paragons or Parasites? Journal of Economic Literature
331-372.
Liquidity management
Term paper presentations
기업재무, 투자론, 금융기관론
WEBEX 571 644 460
6시부터