THE DANISH DOCTORAL SCHOOL OF FINANCE


PHD COURSES

Regular courses

Time
Fall 2007

Lecturers
Ken Bechmann, Claus Parum, Johannes Raaballe, Christian Riis Flor, Carsten Sørensen. 

Purpose
To provide students that are in the early stages of their PhD studies with a firm knowledge and understanding of issues of relevance for optimal capital structure choice and corporate financial policy.

Structure
The course will consist of 8 full-day lectures and exercises spread over the whole 2007 Fall semester (4 two-day internats).  Each day there will be a three-hour session in the morning and a three-hour session in the afternoon

Exams
Students are required to participate actively in the course. There will be student presentation assignments, and the course will include a final six-hour take-home exam.  

Prerequisites
Participants are supposed to have a basic knowledge of finance theory at the level of a Master's degree in Finance.  

Reading list
 The lectures will be based on articles and chapters from relevant textbooks/lecture notes. All material will be handed out electronically except the relevant chapters in the textbook “Theoretical Foundations of Corporate Finance” by João Amaro de Matos (Oxford University Press, 2001).

Course plan
The following topics will be covered: Classical Modigliani-Miller propositions and the effect of taxation, optimal capital structure and dividend policy with agency issues and asymmetric information, capital budgeting/real options issues, and capital structure choice in dynamic settings. (A course plan with readings is attached below.)

Time
 October 23-24, October 31-November 1, November 13-14, and November 26-27. The final six-hour take-home exam is planned to take place on Monday December 10

Place
 Department of Finance, Copenhagen Business School, Solbjerg Plads 3, Frederiksberg. (Session 4 on November 26-27 will be held at Department of Business and Economics, University of Southern Denmark, Campusvej 55, Odense.)

Enrollment
 Enrollment: Please indicate your interest in this course by E-mailing to: cs.fi@cbs.dk (Carsten Sørensen) no later than October 5, 2007.       

Schedule and tentative reading list:

 

1. Week 43, October 23-24, 2007

Classical Modigliani-Miller propositions and the effect of taxation

Amaro de Matos, João (2001). Theoretical Foundations of Corporate Finance, Oxford University Press, chapter 2, pp. 39-58.

Stiglitz, Joseph (1974). ”On the Irrelevance of Corporate Financial Policy”, The American Economic Review, 47, 851-866.

Miller, Merton H. (1977). ”Debt and Taxes”, Journal of Finance, 32, 261-275.

DeAngelo, Harry and Ronald W. Masulis (1980). ”Optimal Capital Structure under Corporate and Personal Taxation”, Journal of Financial Economics, 8, 3-29.

Berens, James I. and Charles J. Cuny (1995). ”The Capital Structure Puzzle Revisited”, Review of Financial Studies, 8, 1185-1208.

Hodder, James E. and Lemma W. Senbet (1990). ”International Capital Structure Equilibrium”, Journal of Finance, 45, 1495-1516.

Graham, John R. (2000). ”How Big Are the Tax Benefits of Debt?”, Journal of Finance, 55, 1901-1941.

2. Week 43, October 23-24, 2007

Classical Modigliani-Miller propositions and the effect of taxation:

Amaro de Matos, João (2001). Theoretical Foundations of Corporate Finance, Oxford University Press, chapter 2, pp. 39-58.

Stiglitz, Joseph (1974). ”On the Irrelevance of Corporate Financial Policy”, The American Economic Review, 47, 851-866.

Miller, Merton H. (1977). ”Debt and Taxes”, Journal of Finance, 32, 261-275.

DeAngelo, Harry and Ronald W. Masulis (1980). ”Optimal Capital Structure under Corporate and Personal Taxation”, Journal of Financial Economics, 8, 3-29.

Berens, James I. and Charles J. Cuny (1995). ”The Capital Structure Puzzle Revisited”, Review of Financial Studies, 8, 1185-1208.

Hodder, James E. and Lemma W. Senbet (1990). ”International Capital Structure Equilibrium”, Journal of Finance, 45, 1495-1516.

Graham, John R. (2000). ”How Big Are the Tax Benefits of Debt?”, Journal of Finance, 55, 1901-1941.

3. Week 46, November 13-14, 2007

Conflicts of interest and payout policy:

Amaro de Matos, João (2001). Theoretical Foundations of Corporate Finance, Oxford University Press, chapter 4, pp. 97-122.

Brennan, Michael J. and Anjan V. Thakor (1990). “Shareholder Preferences and Dividend Policy”, Journal of Finance, 45, 993-1019.

Chowdhry, Bhagwan and Vikram Nanda (1994). “Repurchase Premia as a Reason for Dividends: A Dynamic Model of Corporate Payout Policies”, Review of Financial Studies, 7, 321-350.

DeAngelo, Harry, Linda DeAngelo, and Douglas J. Skinner (2002). “Are Dividends Disappearing? Dividend Concentration and the Consilodation of Earnings”, Working Paper, forthcoming Journal of Financial Economics.

Fama, Eugene F. and Kenneth R. French (2001). “Disappearing Dividends: Changing Firm Characteristics or Lower Propensity to Pay?”, Journal of Financial Economics 60, 3-43.

John, Kose and Joseph Williams (1985). “Dividends, Dilution, and Taxes”, Journal of Finance, 40, 1053-1069.

Lucas, Deborah J. and Robert L. McDonald (1998). “Shareholder Heterogeneity, Adverse Selection, and Payout Policy”, Journal of Financial and Quantitative Analysis, 33, 233-253.

Miller, Merton H. and Kevin Rock (1985). ”Dividend Policy under Asymmetric Information”, Journal of Finance, 40, 1031-1051.

Raaballe, Johannes and Ken L. Bechmann (2004). “Taxable Cash Dividends – A Useful Way of Burning Money”, Working Paper.

4. Week 48, November 26-27, 2007

Real options and capital structure:

Lecture notes on real option analysis (2007). Christian Riis Flor.

Lecture notes on dynamic capital structure (2007). Christian Riis Flor.

In addition some papers which will be announced later. Examples are:

Leland, Hayne (1998). “Agency Costs, Risk Management, and Capital Structure”, Journal of Finance, 53, 1213-1243.

Goldstein, Robert, Nengjiu Ju, and Hayne Leland (2001). “An EBIT-Based Model of Dynamic Capital Structure”, Journal of Business, 74, 483-512.

Christensen, Peter O., Christian Riis Flor, David Lando, and Kristian R. Miltersen (2005). “Dynamic Capital Structure with Callable Debt and Debt Renegotiations”, Working paper.

Dangl, Thomas and Josef Zechner (2004). “Credit Risk and Dynamic Capital Structure Choice”, Journal of Financial Intermediation, 13, 183-204.

Eom, Y. H., J. Helwege, and J.-z. Huang (2004). Structural Models of Corporate Bond Pricing: An Empirical Analysis. The Review of Financial Studies 17(2), 499–544.  

Lambrecht, B. and S. C. Myers (2005). A Theory of Takeovers and Disinvestment. Working paper, Lancaster University Management School.

Mauer, D. C. and S. Sarkar (2005). Real Options, agency conflicts, and optimal capital structure. Journal of Banking and Finance 29, 1405–1428.

> download programme here (pdf) 

 

 

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