• Class Number 4040
  • Term Code 2930
  • Class Info
  • Unit Value 6 units
  • Mode of Delivery In Person
    • Dr Nhan Le
    • Dr Nhan Le
  • Class Dates
  • Class Start Date 25/02/2019
  • Class End Date 31/05/2019
  • Census Date 31/03/2019
  • Last Date to Enrol 04/03/2019
SELT Survey Results

This course introduces students to the academic research in corporate finance. Corporate finance theory deals with the roles of corporate in the capital market and the interactions between investors, managers, regulators and other stakeholders. The objectives of this course are to learn the theories of corporate finance, analyze the research questions, and critically evaluate the academic papers.
This course focuses on selected classic and contemporary theoretical and empirical academic papers and provides students with an advanced and rigorous background in mainstream issues in modern corporate finance research.
At the end of the seminar, it is expected that the students have developed an appreciation of the role of theory in corporate finance research, an in-depth knowledge of the research methods and philosophies employed in researching a wide range of corporate finance problems and issues, and an ability to critically analyze, and evaluate the literature in corporate finance.

Research-Led Teaching

Based on selected classic and contemporary papers published in top academic journals, this course is to lead students to walk into the world of research in corporate finance, acquire rele- vant knowledge from both theoretical and empirical perspectives, and develop important research capabilities with regard to communication, presentation, analysis, writing, and critical thinking.

Required Resources

All required readings can be assessed via Wattle.

Staff Feedback

Students will be given feedback in the following forms in this course: marks and verbal comments to the whole class, groups, and individuals.

Student Feedback

ANU is committed to the demonstration of educational excellence and regularly seeks feedback from students. Students are encouraged to offer feedback directly to their Course Convener or through their College and Course representatives (if applicable). The feedback given in these surveys is anonymous and provides the Colleges, University Education Committee and Academic Board with opportunities to recognise excellent teaching, and opportunities for improvement. The Surveys and Evaluation website provides more information on student surveys at ANU and reports on the feedback provided on ANU courses.

Other Information

Extensions and Penalties

No submission of assessment tasks without an extension after the due date will be permitted. If an assessment task is not submitted by the due date, a mark of 0 will be awarded.


Your final mark for the course will be based on the raw marks allocated for each of your assess- ment items. However, your final mark may not be the same number as produced by that formula, as marks may be scaled. Any scaling applied will preserve the rank order of raw marks (i.e. if your raw mark exceeds that of another student, then your scaled mark will exceed the scaled mark of that student), and may be either up or down.

Support for Students

The University offers a number of support services for students. Information on these is available online from http : //students.anu.edu.au/studentlife/


It is preferable to ask questions in the lecturer through Discussion forum. Centralizing commu- nication in Wattle, let us save the time for dealing with identical/similar inquiries. Only for pri- vate matters (e.g., your project), please email the lecturer. The lecturer’s email address is ”Ken- taro.Asai@anu.edu.au”.

Email When necessary, the lecturer for this course will contact students through course announce- ments in Wattle.

Announcements Students are expected to check the Wattle site for announcements about this course, e.g. changes to timetables or notifications of cancellations. Notifications of emergency cancellations of lectures will be posted on the door of the relevant room.

Class Schedule

Week/Session Summary of Activities Assessment
1 Please note that (***) indicates an empirical paper that will be commented by students in class. INTRODUCTION Readings Agency theory Jensen, M. C. & Meckling, W. H. Theory of the firm: Managerial behavior, agency costs and ownership structure Journal of Financial Economics, 1976, 3, 305 - 360 Property right theory Hart, Oliver, and John Moore, 1990, Property Rights and the Nature of the Firm, Journal of Political Economy 98, 1119-1158. Nature of the firm Rajan, Raghuram G., and Luigi Zingales, 1998, Power in a Theory of the Firm, Quarterly Journal of Economics 113, 387-432. Empirical work Fee, C. Edward, Charles J. Hadlock, and Shawn Thomas, 2006, Corporate Equity Owner- ship and the Governance of Product Market Relationships, Journal of Finance 61, 1217- 1252.
2 CAPITAL STRUCTURE Readings Miller-Modigliani Theory Modigliani, Franco, and Merton H. Miller, 1958, The Cost of Capital, Corporation Finance and the Theory of Investment, American Economic Review 48, 261-297. Capital Structure Puzzle Myers, Stewart C., 1984, The Capital Structure Puzzle, Journal of Finance 39, 575-592. Effects of Managerial Agency Costs Jensen, Michael C., 1986, Agency Costs of Free Cash Flow, Corporate Finance and Takeovers, American Economic Review 76, 323-329. Stulz, Ren? M., 1990, Managerial Discretion and Optimal Financing Policies, Journal of Financial Economics 26, 3-27. *** Group 1-Bernile, G.; Bhagwat, V. & Rau, P. R., 2016 What Doesn’t Kill You Will Only Make You More Risk-Loving: Early-Life Disasters and CEO Behavior, The Journal of Finance. *** Group 2-Doidge, C. and Dyck, A., 2015 Taxes and Corporate Policies: Evidence from a Quasi Natural Experiment. The Journal of Finance, 70, 45-89 Presentation/Comments
3 CAPITAL STRUCTURE Readings Market timing Dong, M.; Hirshleifer, D. & Teoh, S. H., 2012, Overvalued Equity and Financing Decisions Review of Financial Studies, 25, 3645-3683. Leverage puzzle Strebulaev & Yang, 2013, The mystery of zero-leverage firms, Journal of Financial Eco- nomics 109, 1 - 23 Cash holdings Pinkowitz, Stulz, & Williamson, 2016, Do U.S. Firms Hold More Cash than Foreign Firms Do?, Review of Financial Studies 29, 309-348. Labor protection Simintzi, Vig, & Volpin, 2015, Labor Protection and Leverage, Review of Financial Studies 28, 561-591. ***Group 3- Hortacsu, A.; Matvos, G.; Syverson, C. & Venkataraman, S., 2013, Indirect Costs of Financial Distress in Durable Goods Industries: The Case of Auto Manufacturers, Review of Financial Studies, 26, 1248-1290. ***Group 4-Dellavigna, S. And Pollet J. M., 2013, Capital Budgeting versus Market Timing: An Evaluation Using Demographics, The Journal of Finance 68, 237-270. Presentation/Comments
4 EQUITY AND DEBT FINANCING Readings Initial public offering Ritter, Jay, and Ivo Welch, 2002, A Review of IPO Activity, Pricing, and Allocations, Journal of Finance 57, 1795-1828. Doidge, C.; Karolyi, G. A. & Stulz, R. M., 2016, The U.S. listing gap, Journal of Financial Economics. Seasoned equity offering DeAngelo, Harry, Linda DeAngelo, and Ren? M. Stulz, 2010, Seasoned Equity Offerings, Market Timing, and the Corporate Lifecycle, Journal of Financial Economics 95, 275-295. Loan and debt Market Kahl, M.; Shivdasani, A. & Wang, Y.,2015, Short-Term Debt as Bridge Financing: Evi- dence from the Commercial Paper Market, The Journal of Finance 70, 211-255. ***Group 5- Badoer, D. C. & James, C. M., 2016, The Determinants of Long-Term Corporate Debt Issuances, The Journal of Finance 71, 457-492. ***Group 6- Lemmon, M.; Liu, L. X.; Mao, M. Q. & Nini, G., 2014, Securitization and Capital Structure in Nonfinancial Firms: An Empirical Investigation, The Journal of Finance 69, 1787-1825. Presentation/Comments
5 CAPITAL INVESTMENT Readings Investment and business cycles Povel, P.; Sertsios, G.; Kosova, R. & Kumar, P., 2016, Boom and Gloom, The Journal of Finance 71, 2287-2332. Investment in nonprofit firms Adelino, M.; Lewellen, K. & Sundaram, A., 2015, Investment Decisions of Nonprofit Firms: Evidence from Hospitals, The Journal of Finance 70, 1583-1628. Investment of public and private firms Badertscher, B.; Shroff, N. & White, H. D., 2013, Externalities of public firm presence: Evidence from private firms’ investment decisions, Journal of Financial Economics 109, 682 - 706. Investment in multinational firms Hanlon, M.; Lester, R. & Verdi, R., 2015, The effect of repatriation tax costs on U.S. multi- national investment Journal of Financial Economics 116, 179 - 196. ***Group 7- Arif, S. \& Lee, C. M. C., 2014, Aggregate Investment and Investor Sentiment, Review of Financial Studies 27, 3241-3279. ***Group 8-Dougal, C.; Parsons, C. A. & Titman, S. Urban Vibrancy and Corporate Growth The Journal of Finance, 2015, 70, 163-210. Presentation/Comments
6 PAYOUT POLICY Readings Payout policy during financial crisis Floyd, E.; Li, N. & Skinner, D. J., 2015, Payout policy through the financial crisis: The growth of repurchases and the resilience of dividends, Journal of Financial Economics 118, 299 - 316 Financing payouts Farre-Mensa, J.; Michaely, R. & Schmalz, M. C., 2015, Financing payouts, Ross School of Business Paper. Shares repurchase Almeida, H.; Fos, V. & Kronlund, M., 2016, The real effects of share repurchases, Journal of Financial Economics 119, 168 - 185. Dividend tax Hanlon, M. & Hoopes, J. L., 2014, What do firms do when dividend tax rates change? An examination of alternative payout responses, Journal of Financial Economics 114, 105 - 124. ***Group 9- Eije, H. & Megginson, W. L. Dividends and share repurchases in the European Union Journal of Financial Economics , 2008, 89, 347 - 374. ***Group 10- Crane, A. D.; Michenaud, S. & Weston, J. P., 2016, The Effect of Institutional Owner- ship on Payout Policy: Evidence from Index Thresholds, Review of Financial Studies 29, 1377-1408. Presentation Replication Project Due
7 CORPORATE GOVERNANCE Readings Board of director Schmidt, B., 2015, Costs and benefits of friendly boards during mergers and acquisitions, Journal of Financial Economics 117, 424 - 447. Large shareholder McCahery, J. A.; Sautner, Z. & Starks, L. T., 2016, Behind the Scenes: The Corporate Governance Preferences of Institutional Investors, The Journal of Finance 71, 2905-2932. Anti takeover provision Johnson, W. C.; Karpoff, J. M. & Yi, S., 2015, The bonding hypothesis of takeover de- fenses: Evidence from IPO firms, Journal of Financial Economics 117, 307 - 332 Creditor control right Feldhatter, P.; Hotchkiss, E. & Karakaay, O., 2016, The value of creditor control in corpo- rate bonds, Journal of Financial Economics 121, 1 - 27. ***Group 11- Falato, A. & Liang, N., 2016, Do Creditor Rights Increase Employment Risk? Evi- dence from Loan Covenants, The Journal of Finance 71, 2545-2590. ***Group 12-Cohn, J. B.; Gillan, S. L. & Hartzell, J. C., 2016, On Enhancing Shareholder Control: A (Dodd-) Frank Assessment of Proxy Access, The Journal of Finance 71, 1623-1668. Presentation/Comments
8 SHAREHOLDER LITIGATION Innovation Lin, Liu, and Manso, 2018, Shareholder Litigation and Corporate Innovation, Working paper Executive pay Peng and Roell, 2009, Executive Pay and Shareholder Litigation, Review of Finance Cost of debt Ni and Yin, 2018, Shareholder litigation rights and the cost of debt Evidence from UD laws, Journal of Corporate Finance Disclosures Rogers et al, 2008, Shareholder Litigation and Changes in Disclosure Behavior ***Group 13- Bodnaruk, A.& Rossi, M., 2016, Dual ownership, returns, and voting in mergers, Journal of Financial Economics 120, 58 - 80 ***Group 14- Favara, G.; Morellec, E.; Schroth, E. & Valta, P., 2017, Debt enforcement, investment, and risk taking across countries, Journal of Financial Economics 123, 22 - 41. Presentation/Comments
9 MERGER AND ACQUISITION Readings Merger waves Harford, J. What drives merger waves? Journal of Financial Economics , 2005, 77, 529 - 560. Public and private mergers Maksimovic, V.; Phillips, G. & Yang, L., 2013, Private and Public Merger Waves, The Journal of Finance 68, 2177-2217. Mergers and product market Sheen, A., 2014, The Real Product Market Impact of Mergers The Journal of Finance 69, 2651-2688. Merger performance and CEO turnover Lehn, K. M. & Zhao, M., 2006, CEO Turnover after Acquisitions: Are Bad Bidders Fired? The Journal of Finance 61, 1759-1811. ***Group 15- Arikan, A. M. & Stulz, R. M., 2016, Corporate Acquisitions, Diversification, and the Firm’s Life Cycle, The Journal of Finance 71, 139-194. ***Group 16- BENA, J. & LI, K. Corporate Innovations and Mergers and Acquisitions The Journal of Finance, 2014, 69, 1923-1960 Presentation/Comments
10 FINANCIAL CRISIS Readings Causes of financial crisis Diamond, D. W. & Rajan, R. G., 2009, The Credit Crisis: Conjectures about Causes and Remedies, American Economic Review 99, 606-10. Lessons leaned Kashyap, A. K. & Zingales, L., 2010, The 2007-8 financial crisis: Lessons from corporate finance, Journal of Financial Economics 97, 303 - 305. Employment Chodorow-Reich, G., 2014, The Employment Effects of Credit Market Disruptions: Firm- level Evidence from the 2008?9 Financial Crisis, The Quarterly Journal of Economics 129, 1-59 Financing Ivashina, V. & Scharfstein, D., 2010, Bank lending during the financial crisis of 2008, Jour- nal of Financial Economics 97, 319 - 338. ***Group 17- Deyoung, R.; Gron, A.; Torna, G. & Winton, A., 2015, Risk Overhang and Loan Port- folio Decisions: Small Business Loan Supply before and during the Financial Crisis, The Journal of Finance 70, 2451-2488. ***Group 18-Love, I.; Preve, L. A. \& Sarria-Allende, V. Trade credit and bank credit: Evidence from recent financial crises Journal of Financial Economics , 2007, 83, 453 - 469. Presentation/Comments
11 CORPORATE BANKRUPTCY Readings Debt restructuring Demiroglu, C. & James, C. Bank loans and troubled debt restructurings, Journal of Financial Economics , 2015, 118, 192 - 210. Effects on employment Eckbo, B. E.; Thorburn, K. S. & Wang, W., 2016, How costly is corporate bankruptcy for the CEO? Journal of Financial Economics 121, 210 - 229. Bankruptcy laws Rodano, G.; Serrano-Velarde, N. & Tarantino, E., Bankruptcy law and bank financing, Journal of Financial Economics , 2016, 120, 363 - 382. Spillover effects Benmelech, E. & Bergman, N. K., 2011, Bankruptcy and the Collateral Channel, The Journal of Finance 66, 337-378. ***Group 19- Brown, J. & Matsa, D. A., 2016, Boarding a Sinking Ship? An Investigation of Job Applications to Distressed Firms, The Journal of Finance 71, 507-550. ***Group 20-Cerqueiro, G. & Penas, M. F. How Does Personal Bankruptcy Law Affect Startups? Review of Financial Studies, 2016. Presentation/Comments
12 MANAGEMENT COMPENSATION Readings Determinants Gabaix, Xavier, and Augustin Landier, 2008, Why Has CEO Pay Increased So Much?, Quarterly Journal of Economics 123, 49-100. Say on pay laws Correa, R. & Lel, U., 2016, Say on pay laws, executive compensation, pay slice, and firm valuation around the world, Journal of Financial Economics 122, 500 - 520. Evidence in financial industry Philippon, T. & Reshef, A., 2012, Wages and Human Capital in the U.S. Finance Industry: 1909-2006 The Quarterly Journal of Economics. Consequences Burns, Natasha, and Simi Kedia, 2006, The Impact of Performance-based Compensation on Misreporting, Journal of Financial Economics 79, 35-67. *** Group 21- Xu, J. & Yang, J., 2016, Golden hellos: Signing bonuses for new top executives Journal of Financial Economics 122, 175 - 195. ***Group 22-Axelson, U. \& Bond, P., 2015, Wall Street Occupations, The Journal of Finance 70, 1949-1996. Presentation/Comments Term Paper Due

Assessment Summary

Assessment task Value Due Date Return of assessment Learning Outcomes
Presentation 15 % 05/03/2019 31/05/2019 1,2,3
Replication project 25 % 29/03/2019 05/04/2019 1,2
Term paper 60 % 31/05/2019 04/07/2019 1,2,3


ANU has educational policies, procedures and guidelines, which are designed to ensure that staff and students are aware of the University’s academic standards, and implement them. Students are expected to have read the Academic Misconduct Rule before the commencement of their course. Other key policies and guidelines include:

Assessment Requirements

The ANU is using Turnitin to enhance student citation and referencing techniques, and to assess assignment submissions as a component of the University's approach to managing Academic Integrity. For additional information regarding Turnitin please visit the ANU Online website. Students may choose not to submit assessment items through Turnitin. In this instance you will be required to submit, alongside the assessment item itself, hard copies of all references included in the assessment item.

Moderation of Assessment

Marks that are allocated during Semester are to be considered provisional until formalised by the College examiners meeting at the end of each Semester. If appropriate, some moderation of marks might be applied prior to final results being released.


As a further academic integrity control, students may be selected for a 15 minute individual oral examination of their written assessment submissions.


Any student identified, either during the current semester or in retrospect, as having used ghost writing services will be investigated under the Universityfs Academic Misconduct Rule.

Assessment Task 1

Value: 15 %
Due Date: 05/03/2019
Return of Assessment: 31/05/2019
Learning Outcomes: 1,2,3


It is a group-based assignment. Team formation will be done by the Lecturer in week 1, who will also decide on the timing of when each group will present.

Note: It is requested that any students intending to drop out of the course make their decision prior to team formation.

Each week, there will be two presentations in class. Presentations are compulsory and to be done in groups. Students are required to evaluate an academic paper by critically commenting on the papers, evaluating the papers’ weaknesses and suggesting how to improve or extend the papers in terms of motivation, contribution, research design, theory and other aspects.

Presentation slides need to be submitted via Wattle on Tuesday each week. The file name should be labeled as "Presentation - Group XX". All files need to converted to PDF file. All members need to participate in the presentation.

Assessment Task 2

Value: 25 %
Due Date: 29/03/2019
Return of Assessment: 05/04/2019
Learning Outcomes: 1,2

Replication project

Replication project is to be done in the same groups as for the presentation and need to be sent to Wattle. Students are required to conduct empirical analysis on the given data set. The submission should include one mini report including necessary tables, figures, and data analysis and a description of sample construction procedure. Data will be provided in Wattle. Each group has to submit on Turnitin.

The reports should be double-spaced, have a 12 point font and include the number of word count on the cover page. Cleaned dataset (which is used for regression) need to be sent to Wattle with the report through Turnitin. All files need to be converted into PDF file. On the cover page, list out paper name, group No., the first name, last name and student ID of all members in your group. The file name should be : "Replication - Group XX"

Assessment Task 3

Value: 60 %
Due Date: 31/05/2019
Return of Assessment: 04/07/2019
Learning Outcomes: 1,2,3

Term paper

Term Papers are to be done INDIVIDUALLY and need to be submitted on Wattle through Turnitin. The report should include a research question, motivation for the question/contribution to extant literature, hypothesis development, sample selection, and detailed empirical research design.


Word limit: 3000 words (including references). The reports should be double-spaced, have a 12 point font and include the number of word count on the cover page. • All files need to be converted into PDF file. On the cover page, list out the term paper name, the first name, last name and student ID. The file name should be : Term paper - First-name Last-name - Student ID. 

Academic Integrity

Academic integrity is a core part of our culture as a community of scholars. At its heart, academic integrity is about behaving ethically. This means that all members of the community commit to honest and responsible scholarly practice and to upholding these values with respect and fairness. The Australian National University commits to embedding the values of academic integrity in our teaching and learning. We ensure that all members of our community understand how to engage in academic work in ways that are consistent with, and actively support academic integrity. The ANU expects staff and students to uphold high standards of academic integrity and act ethically and honestly, to ensure the quality and value of the qualification that you will graduate with. The University has policies and procedures in place to promote academic integrity and manage academic misconduct. Visit the following Academic honesty & plagiarism website for more information about academic integrity and what the ANU considers academic misconduct. The ANU offers a number of services to assist students with their assignments, examinations, and other learning activities. The Academic Skills and Learning Centre offers a number of workshops and seminars that you may find useful for your studies.

Online Submission

You will be required to electronically sign a declaration as part of the submission of your assignment. Please keep a copy of the assignment for your records. Unless an exemption has been approved by the Associate Dean (Education) as submission must be through Turnitin.

Hardcopy Submission

For some forms of assessment (hand written assignments, art works, laboratory notes, etc.) hard copy submission is appropriate when approved by the Associate Dean (Education). Hard copy submissions must utilise the Assignment Cover Sheet. Please keep a copy of tasks completed for your records.

Late Submission

No submission of assessment tasks without an extension after the due date will be permitted. If an assessment task is not submitted by the due date, a mark of 0 will be awarded.

Referencing Requirements

Accepted academic practice for referencing sources that you use in presentations can be found via the links on the Wattle site, under the file named “ANU and College Policies, Program Information, Student Support Services and Assessment”. Alternatively, you can seek help through the Students Learning Development website.

Extensions and Penalties

Extensions and late submission of assessment pieces are covered by the Student Assessment (Coursework) Policy and Procedure. The Course Convener may grant extensions for assessment pieces that are not examinations or take-home examinations. If you need an extension, you must request an extension in writing on or before the due date. If you have documented and appropriate medical evidence that demonstrates you were not able to request an extension on or before the due date, you may be able to request it after the due date.

Privacy Notice

The ANU has made a number of third party, online, databases available for students to use. Use of each online database is conditional on student end users first agreeing to the database licensor’s terms of service and/or privacy policy. Students should read these carefully. In some cases student end users will be required to register an account with the database licensor and submit personal information, including their: first name; last name; ANU email address; and other information.
In cases where student end users are asked to submit ‘content’ to a database, such as an assignment or short answers, the database licensor may only use the student’s ‘content’ in accordance with the terms of service – including any (copyright) licence the student grants to the database licensor. Any personal information or content a student submits may be stored by the licensor, potentially offshore, and will be used to process the database service in accordance with the licensors terms of service and/or privacy policy.
If any student chooses not to agree to the database licensor’s terms of service or privacy policy, the student will not be able to access and use the database. In these circumstances students should contact their lecturer to enquire about alternative arrangements that are available.

Distribution of grades policy

Academic Quality Assurance Committee monitors the performance of students, including attrition, further study and employment rates and grade distribution, and College reports on quality assurance processes for assessment activities, including alignment with national and international disciplinary and interdisciplinary standards, as well as qualification type learning outcomes.

Since first semester 1994, ANU uses a grading scale for all courses. This grading scale is used by all academic areas of the University.

Support for students

The University offers students support through several different services. You may contact the services listed below directly or seek advice from your Course Convener, Student Administrators, or your College and Course representatives (if applicable).

Dr Nhan Le

Research Interests

Dr Nhan Le

Friday 13:30 14:30
Friday 13:30 14:30
Dr Nhan Le

Research Interests

Dr Nhan Le

Friday 13:30 14:30
Friday 13:30 14:30

Responsible Officer: Registrar, Student Administration / Page Contact: Website Administrator / Frequently Asked Questions