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This Visiting Fellow Seminar Series is organised by the College of Graduate Research Studies with Yong Pung How School of Law. We are honoured to have Professor Holger Spamann from Harvard Law School to share with us his insights in a series of seminars.
Seminar 1: Modigliani & Miller; Cost of Debt I
To create value, businesses need financing, which they obtain in return for financial claims on the business. What is the optimal structure of such claims -- which way of "cutting" the businesses cash flows generates the highest value for entrepreneurs and stakeholders? It used to be thought that the answer hinges primarily on the distribution of investors' risk appetites. Modigliani & Miller showed that that is wrong. We will examine their demonstration, which also demonstrates one of the most powerful concepts of finance, cash flow replication. We will then begin our examination of the factors that do matter, starting with tax and then beginning with debt. While the incentive to avoid taxes is obvious, the frictions introduced by debt are subtle.
Date: 22 August 2023 (Tuesday)
Time: 12.00pm - 3.00pm
Seminar 2: Cost of Debt II; Cost of Equity
We will continue our examination of the cost of debt and then examine the alternative, equity. We will see that equity is an inherently weak claim that comes with considerable risk of managerial agency cost (i.e., managers working for themselves, not outside investors) and of collective action problems between shareholders. We will also explore allegations that "shareholder value" leads to socially harmful "short-termism."
Date: 23 August 2023 (Wednesday)
Time: 8.30am - 11.30am
Seminar 3: Financial Intermediation: Banks (incl. runs, leverage, and liquidity)
Much finance is intermediated. While banks are no longer the most important intermediary in terms of quantity of money, they still occupy a critical position. We will explore the inherent fragility of banks, which serves to illustrate the core concepts of leverage, liquidity, and runs.
Date: 24 August 2023 (Thursday)
Time: 12.00pm - 3.00pm
Seminar 4: Private Equity; Recurring Themes
We will finish the course by examining another financial intermediary, private equity (PE). We will explore why PE poses none of the problems of banks even though PE employs ample evidence. Finally, we will examine recurrent themes in corporate law, financial regulation, and regulation generally, time permitting with connection to PE.
Date: 25 August 2023 (Friday)
Time: 12.00pm - 3.00pm
Venue: All seminars will be conducted in person at Yong Pung How School of Law Meeting Room 5.04 (Level 5).
Registration closes on 21 August 2023 (Monday), 12.00pm.
