Digital Reading Room 2.0 -- CFIN 601: Corporate Finance

CFIN 601: Corporate Finance Report a Broken Link

Corporate finance, in particular, is about management of cash inflows and outflows of a business firm. And, with increased globalized activities, such cash flows are not only in terms of domestic currency but also in terms of foreign currencies. The main objectives of corporate finance are maximization of corporate value and management of corporate financial risks. It deals with both short-term and long-term financial decisions made by business firms as well as with the analytical frameworks and techniques involved in such decisions. This course is definitely useful for those who are planning a career in financial management. Most of the topics discussed are also expected to enhance understanding of the business environment for people pursuing other careers as well. Finance is, and will remain to be, an inseparable function of any business; perhaps more importantly, most business decisions of a firm are evaluated by looking at its financial conditions and outcomes. An understanding of firm’s financial management is crucial for all business managers.

Supplementary Readings

Reading 1: Graham, J. R., & Harvey, C. R. (2001). The theory and practice of corporate finance: Evidence from the field. Journal of Financial Economics, 60(2/3), 187–243.

Reading 2: Tirole, J. (2001). Corporate governance. Econometrica, 69(1), 1–35.

Reading 3: La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. (2000). Investor protection and corporate governance. Journal of Financial Economics, 58(1/2), 3–27.

Reading 4: Friedman, F. (1970). The social responsibility of business is to increase its profits. The New York Times Magazine, September 13, 1970. https://www.nytimes.com/1970/09/13/archives/a-friedman-doctrine-the-social-responsibility-of-business-is-to.html

Reading 5: Admati, A. R. (2017). A skeptical view of financialized corporate governance. Journal of Economic Perspectives, 31(3), 131–150.

Reading 6: Thakor, V. A., (2020). Fintech and banking: What do we know? Journal of Financial Intermediation, Volume 41. Elsevier.

Reading 7: Hennessey, S. (2001). The valuation of common shares: The PEG ratio approach. The Canadian Journal of Financial Planning, 1( 4), 7–11.

Reading 8: Fama, E. F. (1998). Market efficiency, long-term returns, and behavioural finance. Journal of Financial Economics, 49(3), 283–306.

Reading 9: Fama, E. F. (2013). Two pillars of asset pricing. Economics Nobel Prize Lecture. http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2013/fama-lecture.html.

Reading 10: Shiller, R. (2013). Speculative asset prices. Economics Nobel Prize Lecture. http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2013/shiller-lecture.html.

Reading 11: Leone, M. (2003). Going with the flow. CFO.com, 1.

Reading 12: Diomande, M. A., Heintz, J., & Pollin, R. (2009). Why U.S. financial markets need a public credit rating agency. The Economists' Voice, June 2009.

Reading 13: Demirgüç-Kunt, A., & Maksimovic, V. (1996). Stock market development and corporate finance decisions. Finance and Development, June 1996. http://www.imf.org/external/pubs/ft/fandd/1996/06/pdf/demirguc.pdf.

Reading 14: Baker, M., & Wurgler, J. (2015). Do strict capital requirements raise the cost of capital? Bank regulation, capital structure and the low risk anomaly. American Economic Review: Papers and Proceedings, 105(5), 315–320.

Reading 15: de Mooij, R. A. (2011). Tax biases to debt finance: Assessing the problem, finding solutions. IMF Staff Discussion Note, SDN/11/11. http://www.imf.org/external/pubs/ft/sdn/2011/sdn1111.pdf.

Reading 16: Laryea, T. (2010). Approaches to corporate debt restructuring in the wake of financial crises. IMF Staff Position Note, SPN/10/02. http://www.imf.org/external/pubs/ft/spn/2010/spn1002.pdf.

Recommended books for future readings

Claessens, S., Kose, M. A., Laeven, L., & Valencia, F. (Eds.) (2014). Financial crises: Causes, consequences and policy responses. International Monetary Fund publication.

Fox, J. (2009). The myth of the rational market: A history of risk, reward, and delusion of Wall Street. Harper Business.

Lewis, M. (2009). Panic: The story of modern financial insanity. New York & London: W. W. Norton & Company.

Roubini, N., & Mihm, S. (2010). Crisis economics: A crash course in the future of finance. The Penguin Press.

Shiller, R. J. (2012). Finance and the good society. Princeton University Press.

Shiller, R. J. (2015). Irrational exuberance (3rd ed.). Princeton University Press.

Shleifer, A. (2000). Inefficient markets: An introduction to behavioural finance. Oxford University Press.