OPF:FIUDAFRA Corporate Financial Management - Course Information

FIUDAFRA Corporate Financial Management

Extent and Intensity

0/0. 10 credit(s). Type of Completion: dzk.

Teacher(s)

prof. Ing. Daniel Stavárek, Ph.D. (lecturer)

Guaranteed by

prof. Ing. Daniel Stavárek, Ph.D.
Department of Finance and Accounting – School of Business Administration in Karvina
Contact Person: Ing. Irena Szarowská, Ph.D., MPA

Prerequisites

The completion of the course does not require any extra conditions and course can be enrolled independently of other courses.

Course Enrolment Limitations

The course is also offered to the students of the fields other than those the course is directly associated with.

fields of study / plans the course is directly associated with

• Business Economics and Management (programme OPF, D_EKOMAN4)

Course objectives

This is an advanced course in corporate finance. It will introduce students to the main issues in corporate finance, identify principle theoretical tools and empirical approaches, force students to read and understand the greatest contributions in the field, and foster students' thinking about current research questions. The objective of the course is to prepare students to critically evaluate and conduct research in corporate finance.

Syllabus

• Capital structure
  Introduction of several theories of capital structure based of the Modigliani-Miller theorems. Comparison of classic theories with modern approaches like the pecking order theory and the trade-off theory including derivation of the dynamic version of the trade-off theory. Discussion on agency-theoretic arguments and the notion of strategic debt service and leverage policy in industry equilibrium. Empirical challenges in design and estimation of the capital structure models.
  Initial Public Offerings
  Elaboration of three puzzles associated with initial public offering. (1) The offer price of newly issued shares is typically significantly below the price in secondary markets (underpricing). (2) IPO stocks underperform risk-adjusted benchmarks over the long term (long-term underperformance). (3) IPOs are strongly pro-cyclical and sometimes IPO-markets dry up completely (hot and cold markets). Explanation of a theory based on capacity constraints in the investment banking industry that attempts to address all three puzzles.
  Large shareholders
  The role of large blockholders in corporate governance. Discussion on several controversial approaches on how large shareholders influence the corporation. Is there an extraction of private benefits of control to their advantage or superior incentives to monitor managers and offer governance service? Relations between efficiency and liquidity of capital markets and effectiveness of the corporate governance and monitoring.
  Executive compensation
  Executive compensation as a large area of applied microeconomics on the edge of finance, accounting and labor economics. Discussion and understanding of the many facets of the remuneration of top executives, including the sometimes astonishing magnitude of compensation and the structure of contracts. Introduction of a conventional principal-agent model to analyze the optimal structure and design of contracts.
  Corporate takeovers and mergers
  The theoretical and empirical analysis of mergers and acquisitions with particular focus on the creation of synergies, allocation of synergies between the parties, means of payments, takeover defenses, insider trading before announcements, consequences for competition and competition policy, bidder wars, means of payments in mergers, the long-term profitability of mergers, and the corporate governance requirements for successful merger strategies.
  Corporate focus and internal capital markets
  Internal capital market as an alternative to conventional external capital markets in which funds are disbursed to businesses not associated with lender. Internal capital market as an owner-provided financing. Explanation of important consequences of internal financing: (1) more monitoring than external lending; (2) reduction of managers' entrepreneurial incentives; (3) easier and efficient redeployment of assets. Identification and interpretation of the conglomerate discount/premium.

Literature

required literature
• Journal papers assigned by lecturer. info
• BREALEY, R.A. and S.C. MYERS. Principles of Corporate Finance. 11th ed. McGraw-Hill, 2014. ISBN 0078034760. info
• COPELAND, T.E., J.F. WESTON and K. SHASTRI. Financial Theory and Corporate Policy. 4th ed. Pearson Education, 2013. ISBN 9781292021584. info

recommended literature
• MADURA, J. International Financial Management. 12th ed. Cengage Learning, 2015. ISBN 9781305840577. info
• TIROLE, J. The Theory of Corporate Finance. Princeton University Press, 2006. ISBN 9780691125562. info

Teaching methods

One-to-One tutorial
Skills demonstration
Students' self-study

Assessment methods (in Czech)

Kombinovaná zkouška

Language of instruction

English

Further comments (probably available only in Czech)

The course can also be completed outside the examination period.
Information on the extent and intensity of the course: Přednáška 24 HOD/SEM.

Teacher's information

Referee report, research paper proposal and its presentation, oral exam

Activity	Difficulty [h]
Konzultace	56
Ostatní studijní zátěž	370
Přednáška	24
Summary	450

• Enrolment Statistics (Winter 2018, recent)
  
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