Corporate Finance

Corporate finance is the study of firm’s financing decisions and the interaction of these decisions with their investments. But corporate finance does not exist in a vacuum. The financial activities of corporations interact with financial markets, banks, and households. Stock markets trade paper issued by corporations. The state of the general economy and monetary policy affect corporations and their financial decisions.

The question as to how much capital banks should hold relate to the corporate finance topic of optimal capital structure. We therefore have a research agenda that goes beyond what happens inside corporations. We also seek to enhance our understanding of financial markets and banking and, ultimately, to understand the functioning of corporations and the valuation of real projects and corporate securities within the broader context of financial markets, intermediation, and institutions.

Research projects

Exemplary project: Money and Liquidity in Financial Markets (K. Nyborg, P. Östberg)

We argue that fluctuations in stock prices and order flow are linked to conditions in the interbank market for liquidity. Tightness in the interbank market leads banks to engage in what we term “liquidity pull-back”, which involves selling financial assets either by banks directly or by levered investors. Empirical tests on the stock market are supportive: Tighter interbank markets, as measured by the Libor-OIS spread, are associated with relatively more volume in more liquid stocks, selling pressure, especially in more liquid stocks, and negative returns that reverse within three days. We control for market-wide uncertainty and in the process also contribute to the literature on portfolio rebalancing.

Our general point is that money matters in financial markets. From a practical perspective, our results suggest that investors can potentially benefit from timing trades in accordance with fluctuations in interbank conditions and that corporations may benefit from monitoring interbank conditions when considering issuing or buying back securities.

Selected research projects

Connections to courses

Corporate Finance addresses students interested in finance who aim to work in, for example, investment banking, private equity, financial consultancy especially with respect to valuation and corporate restructurings, in finance functions within public or private firms, or as equity analysts. Corporate Finance has a strong presence in the Banking and Finance specialization at the Bachelor’s and Master’s levels. It is also taught to a lesser extent in the Quantitative Finance Master’s program and in the Management and Economics Master’s specialization. The following list provides examples of courses particularly related to our topic.

List of courses

More detailed information on each module can be found by copying the 8-digit code into the search field of the University’s course catalogue.

Course catalogue

Bachelor's level

Corporate Finance I and II BOEC0228
Intermediate Corporate Finance BOEC0050
Betriebswirtschaftliche Steuerlehre I and II BOEC0219
Finance with Excel BOEC0024
Unternehmensbewertung BOEC0221

Master's level

Advanced Corporate Finance I and II MFOEC117  
Advanced Valuation MFOEC148
Takeovers, Restructuring and Corporate Governance MFOEC153
Mergers and Acquisitions MAWWÜF6
Empirical Corporate Finance: Methodology and Applications MFOEC171
International Tax Planning MOEC0207
Seminar zur betriebswirtschaftlichen Steuerlehre MOEC0112

Doctoral level

Doctoral Colloquium in Corporate Finance DOEC0254
Empirical Corporate Finance DOEC0040

The PhD training is coordinated across Switzerland within the Swiss Finance Institute PhD program in Finance.

Faculty members involved

The following Faculty members research and/or teach in Corporate Finance.

Department of Banking and Finance (IBF)

Prof. Dr. Michel A. Habib
Prof. Dr. Kjell G. Nyborg (main contact for topic)
Prof. Dr. Per Östberg
Prof. Dr. Alexander F. Wagner