Department of Business Administration

Special Topics in Finance(G465)

Course Code Course Name Semester Theory Practice Lab Credit ECTS
G465 Special Topics in Finance 7 0 3 3 3 5
Prerequisites
Admission Requirements
Language of Instruction Turkish
Course Type Elective
Course Level Bachelor Degree
Course Instructor(s) Melik ERTUĞRUL melikertugrul@gmail.com (Email)
Assistant
Objective This course aims to introduce several topics of corporate finance which are not analyzed by introductory finance courses in detail. This course forces students to read and understand “greatest hits” in corporate finance, and it aims to teach students several valuation and financing methods.
Content Week 1. Corporate Governance & Agency Costs – I
Week 2. Corporate Governance & Agency Costs – II
Week 3. Corporate Social Responsibility
Week 4. Mergers & Acquisitions – I
Week 5. Mergers & Acquisitions – II
Week 6. Executive Remuneration
Week 7. Political Connections
Week 8. Entrepreneurial Finance – I
Week 9. Entrepreneurial Finance – II
Week 10. Capital Structure – I
Week 11. Capital Structure – II
Week 12. Dividend Policy
Week 13. Project Finance
Week 14. Trade Finance
Course Learning Outcomes Students who complete this course should be able to:
1. Understand why corporate governance and agency costs are so significant.
2. Comprehend the logic behind M&As, M&A valuation and defense mechanisms.
3. Have an idea about executive renumeration and political connections.
4. Analyze capital structure and dividend decisions from a theoretical and practical perspective.
5. Understand practical financing techniques including project finance and trade finance.
Teaching and Learning Methods
References Weeks 1-2:
• 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.
• Jensen, M. C., 1986, Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers, American Economic Review 76, 323-329.
• Shleifer, A., and R. Vishny, 1997, A Survey of Corporate Governance, Journal of Finance 52, 139-157.
• Gompers, P., J. Ishii, and A. Metrick, 2003, Corporate Governance and Equity Prices, Quarterly Journal of Economics 118, 107-156.
Week 3:
• Ferrell, A., H. Liang, H., and L. Renneboog, 2016, Socially responsible firms, Journal of Financial Economics, 122(3), 585-606.
• Liang, H. and L. Renneboog, 2014, Finance and Society: the Foundations of Corporate Social Responsibility, WP CentER. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2360633
• Flammer, C., 2015, Does Corporate Social Responsibility Lead to Superior Financial Performance? A Regression Discontinuity Approach, Management Science 61, 2549– 568.
Weeks 4-5:
• Martynova, M. and L. Renneboog, 2008, A century of corporate takeovers: What have we learned and where do we stand?, Journal of Banking and Finance 32 (10), 2148-77.
• Rhodes-Kropf, M. and S. Viswanathan, 2004, Market Valuation and Merger Waves, Journal of Finance 59(6), 2685-2718.
• Martynova, M. and L. Renneboog, 2008, Spillover of Corporate Governance Standards in Cross-Border Mergers and Acquisitions, Journal of Corporate Finance 14, 200-223.
• Martynova, M. and L. Renneboog, 2009, What Determines the Financing Decision in Corporate Takeovers: Cost of Capital, Agency Problems, or the Means of Payment?, Journal of Corporate Finance 15 (3), 290-315.
• Betton, S., E. Eckbo, R. Thompson and K. Thorburn, 2014, Merger Negotiations with Stock Market Feedback, Journal of Finance, The Journal of Finance 69, 1705–1745.
• Servaes, H. and A. Tamayo, 2014, How do industry peers respond to control threats?, Management Science 60, 380 – 399
Week 6:
• Malmendier, U., and G. Tate, 2009, Superstar CEOs, The Quarterly Journal of Economics 124 (4), 1593-1638.
• Nihat A., E. de Bodt, H. Bollaert, and R. Roll, 2015, CEO Narcissism and the Takeover Process: From Private Initiation to Deal Completion, Journal of Financial and Quantitative Analysis
• Jenter, D., and Kanaan, F. 2015. CEO turnover and relative performance evaluation, Journal of Finance 70
• Geiler, Ph. and L. Renneboog, 2015, Are Female Top Managers Really Paid Less?, Journal of Corporate Finance 35, 345-369. Bertrand, M. and Mullainathan, 2001, Are CEOs paid for luck? The ones without principals are, Quarterly Journal of Economics 116, 901-932.
• Kulich, C., S. A. Haslam, L. Renneboog, M. Ryan, and G. Trojanowski, 2011, Who Gets the Carrot and Who Gets the Stick? Evidence of Gender Disparities in Executive Remuneration, Strategic Management Journal 32, 301-321
Week 7:
• Fisman, R., 2001, Estimating the Value of Political Connections, American Economic Review, 91, 1095-1102.
• Khwaja, A. I. and A. Mian, 2005, Do Lenders Favor Politically Connected Firms? Rent Provision in an Emerging Financial Market, Quarterly Journal of Economics, 120, 1371-1411.
Weeks 8-9:
• Robb, Alicia M., and David T. Robinson. "The Capital Structure Decisions of New Firms." Review of Financial Studies 27, no. 1 (2014): 153-179.
• Cassar, Gavin. "The financing of business start-ups." Journal of Business Venturing 19, no. 2 (2004): 261-283.
• Denis, David J. "Entrepreneurial finance: an overview of the issues and evidence." Journal of Corporate Finance 10, no. 2 (2004): 301-326.
Weeks 10-11:
• Miller, Merton H. 1988. "The Modigliani-Miller Propositions after Thirty Years." Journal of Economic Perspectives, 2, pp. 99-120.
• M. R. Roberts and A. Sufi, 2009, "Control Rights and Capital Structure: An Empirical Investigation, Journal of Finance, 64, pp. 1657-1695.
• Von Eije, H., and WL Megginson, “Dividends and share repurchases in the European Union”, Journal of Financial Economics 89, pp. 347-374.
• M. R. Roberts, M. Lemmon and J. Zender, 2008, "Back to the Beginning: Persistence and the Cross-Section of Corporate Capital Structure" Journal of Finance, 63, pp. 1575-1608
Week 12:
• Overview book: by DeAngelo, H., L. DeAngelo, D. Skinner, 2008, Corporate Payout Policy, Foundations and Trends in Finance Vol. 3 (2-3), 95-287
• Michaely, R. and M. Roberts, 2011, Corporate Dividend Policies: Lessons from Private Firms, Review of Financial Studies 25, 711-746
• Renneboog, L. and G. Trojanowski, 2011, Patterns in Payout Policy and Payout Channel Choice, Journal of Banking and Finance 35 (6), 1477-1490.
Weeks 13-14:
• Lecture Notes & Guest Speaker
Print the course contents
Theory Topics
Week Weekly Contents
1 Corporate Governance & Agency Costs – I
2 Corporate Governance & Agency Costs – II
3 Corporate Social Responsibility
4 Mergers & Acquisitions – I
5 Mergers & Acquisitions – II
6 Executive Remuneration
7 Political Connections
8 Entrepreneurial Finance – I
9 Entrepreneurial Finance – II
10 Capital Structure – I
11 Capital Structure – II
12 Dividend Policy
13 Project Finance
14 Trade Finance
Practice Topics
Week Weekly Contents
Contribution to Overall Grade
  Number Contribution
Contribution of in-term studies to overall grade 3 40
Contribution of final exam to overall grade 1 60
Toplam 4 100
In-Term Studies
  Number Contribution
Assignments 1 0
Presentation 1 0
Midterm Examinations (including preparation) 1 0
Toplam 3 0
No Program Learning Outcomes Contribution
1 2 3 4 5
1 The acquisition of high-level knowledge of the functions of production management and marketing, management, accounting and finance; the skill of using this knowledge. X
2 The acquisition of basic conceptual knowledge about scientific fields related to professional life, such as law, economics, sociology, psychology, social psychology and quantitative methods. X
3 The ability to work effectively in a team; the ability to pass on knowledge to other members of the team. X
4 The competence to use his/her knowledge on the field, to analyze and interpret the data obtained, to identify the problems encountered, to provide appropriate solutions and scientifically defend these solution suggestions when necessary. X
5 The competence to determine the aims and objectives of the company or institution in which he/she is employed by taking into account the needs, the competitive dynamics of the market and by calculating the risks incurred; the ability to engage in entrepreneurship and establish and manage a business. X
6 Awareness of constantly updating his/her professional knowledge and skills; the ability to adapt to change and innovation; the competence to evaluate critically the information he/she has acquired. X
7 Basic knowledge of information and communication technologies required for professional life; the ability to use core office programs at an advanced level; expertise in data processing and report writing in the IT environment. X
8 Ability to follow current information in his/her field in both English and French and to communicate in writing and verbally with stakeholders in both languages. X
9 The ability to conduct researches and studies taking into account the market, dynamics of competition, organizational and global factors and scientific methods; contribute to projects, take responsibility in projects, display competence to make innovative and effective decisions. X
10 Ability to develop strategies, find creative solutions to management problems by building relations with other areas of the social sciences and take the responsibility of these decisions. X
11 Consciousness of taking into account ethical values, when making decisions and being involved in business life. X
12 Awareness of the impact of practices related to his/her field on the global and social dimensions (universality of social rights, social justice, cultural values, environmental problems, sustainability, etc.) and their legal consequences. X
Activities Number Period Total Workload
Class Hours 14 3 42
Working Hours out of Class 12 2 24
Assignments 1 17 17
Presentation 1 12 12
Midterm Examinations (including preparation) 1 15 15
Final Examinations (including preparation) 1 20 20
Total Workload 130
Total Workload / 25 5,20
Credits ECTS 5
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