Syllabus

School of Business and Economics

Corporate Governance and Financial

Stakeholders (2425-EBC4052)
EBC4052

Academic year: 2024-2025

Course period: -100-EBC4052
Exported at: 19/07/2024
Nothing in this publication may be reproduced and/or made public by means of printing, offset, photocopy or microfilm or in any digital, electronic, optical or any other form
without the prior written permission of the owner of the copyright.
 Course coordinator(s) / Teaching Team

Students should always contact their tutor first. Prof. Kleimeier will act as the coordinator during the course.

Prof. Dr. S. Kleimeier – course coordinator: [email protected]

(mailto:[email protected])

Tutors: to be announced

3
Table of Contents
Course coordinator(s) / Teaching Team 3

About the course 7

To My Timetable 8

Detailed Course Content and Learning Objectives 8

Course Schedule 9

Assessment Rules 10

Validity of Partial Grades and Registration 15

Irregularities, Fraud and Plagiarism 16

Comments, Exam Inspection and Appeal 17

Student Code of Conduct - Overall 18

Student Code of Conduct - Specific 19

Global Citizenship Education and Competency Development 22

Support 24

Module 1 - Introduction to Corporate Governance & Financial Stakeholders 25

Learning Goals of Module 1 25
Preparation for Session 1 25
Session 1 – Refresher Tutorial: Administrative Issues & Discussion of Ta... 25
Task 1.1: Valuation Refresher 25
Example of case write-up 26
Session 2 – Lecture: Course Opening 27

4
 Session 3 – Concept Tutorial: Discussion of Task 1.2 27
Task 1.2: Corporate Governance & Financial Stakeholders 27

Module 2 - Equity Investors as Stakeholders 29

Learning Goals of Module 2 29
Session 4 – Concept Tutorial: Discussion of Task 2.1 29
Task 2.1: Engagement by Institutional Equity Investors 29
Session 5 – Concept Tutorial: Discussion of Task 2.2 30
Task 2.2: Shareholder Engagement & Debtholders 30
Session 6 – Guest Lecture: Institutional Equity Investors in Practice 30

Module 3 - Creditors as Stakeholders 32

Learning Goals of Module 3 32
Session 7 – Concept Tutorial: Discussion of Task 3.1 32
Task 3.1: Concentrated Debt Ownership by Banks in Project Finance 32
Session 8 – Case Tutorial: Discussion of Task 3.2 33
Assignment: Task 3.2: Case – Nava Bharat: Energy Solutions for India 33

Module 4 - Governments as Stakeholders 34

Learning Goals of Module 4 34
Session 9 – Concept Tutorial: Discussion of Task 4.1 34
Task 4.1: The Government as Financial Stakeholder & Privatization 34
Session 10 – Case Tutorial: Discussion of Task 4.2 35
Assignment: Task 4.2: Case - Aramco's Privatization and IPO Dilemma: Tim... 35

Module 5 - Stakeholders & Financial Distress 36

Learning Goals of Module 5 36
Session 11 – Concept Tutorial: Discussion of Task 5.1 36
Task 5.1: Creditors’ Role in the Resolution of Financial Distress 36
Session 12 – Concept Tutorial: Discussion of Task 5.2 37
Task 5.2: Government's Role in the Resolution of Financial Distress 37
Session 13 – Case Tutorial: Discussion of Task 5.3 37
Assignment: Task 5.3: Case - Latam Airlines and COVID-19: Seeking Bankru... 38

Module 6 - Corporate Governance Debate & Essay 39

Learning Goals of Module 6 39
Session 14 – Debate Tutorial: Corporate Governance Debate of Task 6.1 39
Task 6.1: Corporate Governance Debate 39

Module 7 - Examination 41
Information Regarding the Examination 41

5
Learning Resources 42

Learning Resources: Lecture 42

Learning Resources: Reference List 42

Learning Resources: Articles and Cases from HBS 44

Learning Resources: Optional Readings for Enthusiasts 45

6
The purpose of this course is to provide an understanding of corporate governance, i.e. how different corporate
structures can lead to a better alignment of managers’ interests with those of financial stakeholders.

In the first part of the course, the prerequisites needed for an in depths understanding of corporate governance are
discussed. Corporate governance will be motivated both from an agency perspective as well as from a financial
stakeholder perspective. Also, valuation will be discussed which is at the very heart of finance and is the core
paradigm that we will use throughout our study of corporate governance. The basic evaluation techniques will be
refreshed.

The second part of the course focuses on specific types of financial stakeholders and their impact on the
governance of companies. The course explores the role of shareholders and pays attention to shareholder
engagement. Regarding other financial stakeholders, this course explores project finance, privatization and
bankruptcy as examples of corporate structures in which other financial stakeholders such as banks, bondholders
or the government play an important role.

This course is a compulsory course in the Master International Business - Strategic Corporate Finance program, an
elective in the Master Business Research and Master Fiscal Economics. It is an SBE Non Degree Course and open
to SBE Exchange Master students. This course carries 6.5 ECTS points. Note that 1 ECTS represents 25 to 30 hours
of study. In addition to the weekly tutorial sessions of this course, you are thus expected to study for at least
another 20 hours per week on your own or with your team.

Prerequisites: Courses and workload are very demanding for all of SBE’s master courses. Exchange students need
to have obtained a Bachelor degree in business. Exchange students need to major in finance in their Master.
Students are expected to understand the following concepts: capital budgeting including NPV, IRR, the calculation
of WACC, the definition and estimation of cost of debt and equity, CAPM. The basics of financial accounting are
also a prerequisite. An advanced level of English is required.

You can find course descriptions, objectives and ECTS credits via https://code.unimaas.nl/

⚠ This Canvas course is carefully filled with all necessary information. When unexpected differences occur
between Canvas and Student Portal, the information provided in Student Portal is leading.

7
 To My Timetable

https://timetable.maastrichtuniversity.nl

Detailed Course Content and Learning Objectives

The purpose of this course is to provide students with an understanding of the important issues affecting the
relationship between managers, equityholders and other financial stakeholders. In particular, the focus lies on the
role that the different financial stakeholders play in the governance of the company. After successfully completing
the course, students will have achieved the following learning goals and objectives:

Being able to measure shareholder wealth.

Understanding the agency view of corporate governance.
Being able to differentiate the roles of different stakeholders in the governance of the firm including
equityholders, debtholders and governments.
Understanding the specific role of institutional investors as equityholders and the impact of their
engagement and activism on the firm and other stakeholders.
Understanding the specific role of banks as financial stakeholders with concentrated debt ownership.
Understanding the specific role of the government as a financial stakeholder and judging the pros and cons
of privatization of state owned enterprises.
Understanding the role of financial stakeholders in the resolution of financial distress.
Being able to assess, defend and oppose a corporate governance proposition.

In the first module of the course, students will refresh the prerequisites needed for an in-depths understanding of
corporate governance. On the one hand, students will understand corporate governance as a solution to principle-
agency problems between the company’s managers and financial stakeholders. On the other hand, students will
refresh their knowledge of valuation which is at the very heart of finance and is the core paradigm that we will use
throughout our study of corporate governance.

The remaining modules of the course focus on specific types of financial stakeholders and their implications for
the governance of the company. Students will learn about the role of two types of financial stakeholders – equity-
and debtholders. With respect to debtholders, students will learn about project finance as a special type of
incorporation in which banks are the dominant financial stakeholders. With respect to equityholders, students will
explore the role of the governments and institutional investors as equityholders. Finally, students will learn how the
relationship between financial stakeholders changes when companies become financially distressed. Students will
learn about the role the debtholders and governments can play in resolving financial distress in general and with
reference to the economic crisis caused by the Corvid-19 pandemic in particular.

The course primarily investigates a company’s stakeholder structure from the perspective of corporate financial
strategy, corporate governance and firm value. However, privatization, project finance and financial distress have a

8
broader economic and societal impact and relevance. Project finance, in particular in developing countries,
furthermore raises concerns regarding sustainable development. Students will also explore these issues during the
course.

Students will learn about each type of financial stakeholder in different ways: First, students will develop an
understanding of the financial stakeholder’s role in the governance of the company by studying academic literature
– both theoretical and empirical. Second, students will apply this knowledge to real-life situations presented in form
of case studies. Third, students will debate their views on a corporate governance proposition among themselves.
Finally, students will dig deeper into a specific corporate governance topic in form of an individual essay.

During the course students will also be able to acquire global citizenship competencies. The concept tutorials will
train students in social responsibility / normative competences, i.e. the sub-categories of personal responsibility
and active listening. The case tutorials will train students in global literacy/systems thinking, i.e. the sub-category
of complex problem solving. The debate and essay will train students in global literacy/systems thinking, i.e. the
sub-categories of perspective taking and critical thinking.

Course Schedule

The table below provides the timetable for the course. Details for each lecture or tutorial session are listed in
Modules of this Canvas course. However, the following common structure applies to the tutorials:

1. Each tutorial-group will be split into 3 teams. Each team will be in charge of a certain tutorial as outlined in the
table above. The teams will be formed by the tutors during session 1.

2. There are different types of tutorials: a refresher tutorial, concept tutorials, case tutorials, a debate tutorial and an
essay tutorial.

All students need to be prepared for the refresher tutorial, have studied the assigned literature in advance and are
expected to actively participate in the discussion.

During each concept tutorial, the assigned team will first present their synopsis of the literature, followed by a
general discussion. This implies that all students need to be prepared for the tutorial, have studied the assigned
literature in advance and are expected to actively participate in the discussion.

During each case tutorial, the assigned team will first present their case analysis, followed by a general discussion
in which all students are expected to participate. All teams have to prepare a solution to the respective case in
advance so that they can actively participate in the case discussion.

For the debate tutorial, new teams will be formed. Each team will be given a proposition on either project finance,
privatization or common ownership in advance so that the team can prepare for the debate based on the required
literature. During the debate, two teams will face each other and argue either in favor or against the respective
proposition.

All students need to be prepared for the essay tutorial, have prepared their proposition in advance, present their
proposition and are expected to actively provide peer feedback.

9
 Assessment Rules

The following table summarizes the assessment rules. Details are provided below.

10
Students are required

1. To obtain a partial participation grade of 5.5 or higher.

i. Tutorials

a. Each team has to submit a written solution to each of the three cases of tasks 3.2, 4.2 and 5.3.
These solutions have to be handed in by 8.30 am (UTC +2) on the day of the respective tutorial via
the respective assignments in the Canvas course. If a write-up is handed in after this deadline, a grade
of zero (0.0) will be received for the write-up.

b. The case write-up is a team effort. Members of the same team must contribute equally and jointly
to each case write-up. Different teams are not allowed to work together. If any degree of similarity
between the case write-ups of different teams that appears to be due to cooperation between teams
is noticed by the tutors, the Board of Examiners will be informed and institute proceedings against the
students according to the EER. Any other form of fraud or plagiarism will also be reported to the
Board of Examiners.

c. During the tutorials, presentations will be given by the teams. During the debate tutorial, each team
will participate in one debate. In general, students must actively participate during all tutorial
sessions.

ii. The partial participation grade is calculated as the equally weighted average of the following components
and rounded to the nearest single after-comma digit:

Team grade for the write-up of the case of task 3.2

Team grade for the write-up of the case of task 4.2
Team grade for the write-up of the case of task 5.3
Individual grade for the oral participation during the tutorials including the discussions as well
as the contribution to and participation in the team’s presentations and debate.

2. To obtain a partial examination grade of 5.5 or higher.

i. The examination takes the form of an individual, closed-book exam with a duration of 2 hours.

11
 ii. Details regarding the examination are provided in Module 7 - Examination.

iii. For repeat students who enroll as ‘exam only’ in academic year 2024/25, this examination represents their
partial examination grade as outlined in the assessment rules for EBC4052 in academic years 2022/23 and
2023/24.

3. To pass the attendance requirement.

i. Students who are present in person for at least 10 tutorials among sessions 1, 3 to 5 and 7 to 14 will pass
the attendance requirement. Students who are present in person for fewer than 10 tutorials will fail the
attendance requirement.

The total grade consists to 50% of the partial participation grade and 50% of the partial examination grade. If
requirements 1 and 2 and 3 are fulfilled, the student will receive a course grade that equals the total grade. If a
student fails to fulfill requirements 1 or 2 but fulfills requirement 3, the student will receive a course grade that is
the minimum of a 5.0 and the total grade. If a student fails to fulfill requirement 3, the student will receive a course
grade of NG (no grade). A student who does not participate in the examination under requirement 2 will receive a
course grade of NG (no grade).

A student who fails requirement 1 will be offered one case study as a make-up case in academic year
2024/25. The write-up for this case study has to be completed individually. The grade for this make-up case will
replace the student’s lowest grade among the components listed under 1.ii. above. Details regarding the make-up
case will be announced in the Canvas course. The make-up case is an individual effort. Each student must submit
his / her own make-up case and students are not allowed to work together. If any degree of similarity between the
essays of different students that appears to be due to cooperation between students is noticed, the Board of
Examiners will be informed and institute proceedings against the students according to the EER. Any other form of
fraud or plagiarism will also be reported to the Board of Examiners.

A student who fails requirement 2 will be offered a resit examination. This resit examination will take the
same form as the first sit of the examination and will take place during the resit week for courses of period 1.

Regarding requirement 3 please note: There is no resit opportunity for requirement 3. This is due to the fact
that – by its very nature – attendance can only be obtained and assessed within the relevant course period, e.g.
during the tutorials.

Fraud and plagiarism will always be reported to the Board of Examiners.

The course coordinator has the right to announce changes relating to all elements of the course during the block.
Any such changes will listed in the Canvas course and also be announced during the sessions by the tutors.

Regarding the presentations during tutorials:

In general, presentations should be supported by PowerPoint slides. The presenters should engage the group
during the presentation (for example via discussion questions). Non-presenting students should also prepare
questions that they would like to pose during the tutorial.

12
The presentations are expected to take at most 45 minutes excluding the time spend on engagement and
discussion with the group.

The case presentations should address the questions posed for the respective task. For the quantitative part of a
case, the assigned team should present their analytical approach and results. For the qualitative part of a case, the
assigned team should present their assessment and position but should also prepare discussion points.

To properly prepare for the presentations of the academic literature, the assigned team should start with the
questions posed for the respective task and review the assigned literature with these questions in mind. - It is
important to obtain insights into the aim of the assigned literature, the most relevant results, and the relationships
between the different articles. Thus, an integrated presentation of the literature is expected. The assigned team
should not present the articles sequentially one-by-one but present an overall picture and highlight the most
relevant elements of each article. - For the discussion, the assigned team should prepare various discussion points,
which are more detailed than only the assigned questions. The assigned team should also prepare their “answers”
to their discussion points because they need to be able to lead the discussion into the desired direction and thereby
facilitate an in-depth, high-quality discussion. - The assigned team should make sure that all articles are adequately
covered but it is also the responsibility of the other students to raise issues that they find important during the
discussion.

The evaluation dimensions and criteria for the case and literature presentations are listed in the table below.

13
Regarding the case write-ups:

The cases that you have to analyze are based on actual situations of existing companies. The cases are extensive
and contain many details in the text as well as in the exhibits. Use this information when analyzing the case.
Regarding the case questions, take the following into account. This will be relevant for the assessment of your
case-write up (see table below):

Base your analysis on the information provided in the case. The cases describe actually existing companies,
so do not look for information beyond the case. You should provide your own analysis of the case
information, citing studies that analyze the case situation is not allowed.
Regarding essay questions, you should proceed beyond general statements towards a specific analysis of
the case. Apply theories and concepts and discuss them in the context of the case.

14
 Regarding quantitative questions, your calculations must be clearly understandable for the reader.
If you make assumptions, state them clearly and justify them.
If you have to make choices, explain your choices in detail. Do not just pick a number from the case or
a methodology without explaining why.
Put all your calculations in an understandable manner in tables and place these in the text. Explain
your calculations! Do not add appendices to your text with the reference “for details, see appendix”. If
you yourself cannot explain your calculations in your own words, you cannot expect a reader to
understand an appendix full of tables either.
Be consistent! If you interpret information in the case in a certain way, apply the same interpretation
throughout the whole analysis.

The write-up must be 15 pages or less. This includes everything: cover page, text, tables, references, etc.! Use
standard margins in MSWord with Times New Roman font 11 and 1.5 line spacing. Tables can have Times New
Roman font 8 and 1.0 line spacing. Note that any information from page 16 onwards will not be considered!

The evaluation dimensions and criteria for the case write-up are listed in the table below. Note that for each case,
the Content dimension will be disaggregated to reflect the specific case questions.

The case write-ups are a group assignment. You have to attach a statement of originality
(https://canvas.maastrichtuniversity.nl/courses/19799/files/4123956) to the write-up. Any form of plagiarism or
fraud are strictly forbidden. Possible plagiarism and fraud cases are immediately reported to the Board of
Examiners.

Assessment of case write-up:

Validity of Partial Grades and Registration

If you have to redo (a) component(s) of the course in the next academic year you have to:

15
 1. Register for the exam only (in case you have failed the written examination but have passed other parts of
the course). In principle, passed partial requirements (components) of the course will remain valid in the
academic year in which the partial results are obtained and two (2) more academic years. In exceptional
cases, it is within the Board of Examiners’ competence to determine otherwise. The final grade will be
calculated using the weights that were used in the academic year in which you followed the course.
2. Register for education. If you decide to register for tutorials, you will get new grades for those grades that
are assessed during the tutorial meetings (e.g., participation, presentation).

In case you have not passed the final written examination and you have not passed all other partial requirements of
the course, you may register for the “education” option next academic year. That is, you follow the course again and
re-take all examination components again, including partial requirements such as participation, hand-in exercises,
etc.

Note that you have to register for the option that applies to you during next academic year. Keep an eye on
registration deadlines.

Irregularities, Fraud and Plagiarism

In order to protect the reputation of the degrees that you – as students – receive, instances of cheating, fraud or
plagiarism (together called 'irregularities') are treated extremely seriously.

Fraud including plagiarism, is understood as a student’s act or failure to act that makes it partially or fully
impossible to correctly assess their knowledge, insight and skills. Plagiarism is understood as the presentation of
one’s own or other people’s ideas or words without adequate reference to the source. Submitting work or
assignments acquired from or written by a third party and/or generated by artificial intelligence software (such as
ChatGPT) is considered fraud. Any assignment is an individual piece of work, which means that plagiarism is
strictly forbidden. Equally, the use of mobile phones, communication devices, laptops, books, or any other
information carrier (whether the phone or other device is turned on or off, used or not used, etc. is irrelevant) during
an examination is also forbidden. Please make sure to read and respect the Rules of Procedure for Examinations.

Please keep in mind (unless stated otherwise in writing):

Individual assignments: These assignments should be executed individually and independently. This also
applies to individual take-home examinations.
Group assignments: All group members are jointly responsible for the assignment. It is not allowed to
collaborate and/or share your group assignment with other groups within your course.

If the Board of Examiners concludes that an irregularity, fraud and/or plagiarism has occurred in an examination,
they may take appropriate measures or impose sanctions in accordance with SBE’s policy on fraud, including
plagiarism.

More information can be found in the SBE BSc and MSc EER and on MySBE
Intranet: https://intranet.maastrichtuniversity.nl/en/fraud-and-plagiarism

16
 Comments, Exam Inspection and Appeal

If you want to comment on the exam content, inspect your exam and/or lodge an appeal, there are procedures in
place.

Comments

If you have comments about the examination itself (for example an incorrectly formulated question, missing
information, or doubts about answer choices), you can submit these to the course coordinator via ExamComments
(http://examcomments.sbe.maastrichtuniversity.nl/) within five working days after the day of the exam.

Exam inspection

If you would like to have clarification about the outcome of the examination, you can participate in the exam
inspection procedure. The exam inspection takes place within ten working days after the publication of your
examination results. Your course coordinator will inform you when and how you can do this (usually via the course
page in Canvas).

If you remain of the opinion that the assessment is not justified, you may lodge an appeal with the Board of Appeal
for Examinations via the Complaint Service Point (https://www.maastrichtuniversity.nl/support/during-your-
studies/complaints-service-point/filing-complaint) within six weeks’ time after the date of the decision. Please
note that we expect that you only submit an appeal once you have completed the rest of the above-mentioned
procedures. The appeal procedure is explained below.

Appeal procedure

You may lodge an appeal with the Board of Appeal for Examinations via the Complaint Service Point against:

Decisions as mentioned in the Education and Examination Regulations (for example the Binding Study
Advice or admission procedures)
Decisions of the Board of Examiners
Decisions of Examiners.

You may only appeal if a decision has gone directly against your interests.

Good to know

If you can demonstrate that you are not able to take part in the inspection procedure within the specified
period due to circumstances beyond your control, please contact the course coordinator within 5 days after
the date of inspection.
Next to the appeal procedure, it is also possible to file a complaint in certain situations. In these cases,
please turn to the Complaint Service Point (https://www.maastrichtuniversity.nl/support/during-your-
studies/complaints-service-point/filing-complaint) .

17
 Student Code of Conduct - Overall

How do we wish to interact with each other? Here you will find a highlight of the values of the School of Business
and Economics (SBE), which inspire our community and act as a framework for the personal conduct of employees
and students:

01 Respect
First of all, we should be able to count on each other: among staff, among students, and in cooperation with each
other. Respect, reliability, taking responsibility and self-reflection are the core concepts here. This includes, but is
not limited to, the use of appropriate language in both written and spoken communication.

02 Commitment
We are part of a community of motivated students and staff. We expect students and staff to express their
intellectual passion through ambition, initiative and commitment. Staff and students must encourage each other in
this process.

03 Professionalism
Staff and students contribute to an inspiring work and academic climate from their various fields of expertise,
knowledge and experience. We value each other's contribution in word and gesture. Students and employees have
many rights as well as obligations and we acknowledge these and apply them appropriately and professionally at
all times.

04 Inclusivity
Our School is dedicated to creating an inclusive environment for everyone, regardless of race, ethnicity, religion,
colour, nationality, sexual orientation, gender etc. The inclusion of all students and staff members is fundamental to
our School’s diverse and international character. English is used as the lingua franca at all times within our School.

18
05 Integrity
We are committed to protecting and guaranteeing academic integrity. This means taking exams independently and
honestly, indicating sources when writing a paper, essay or thesis and always being truthful when filling out forms
and other documentation.

This Code of Conduct offers the possibility to hold someone accountable for undesirable behaviour. For more
details, including complaint procedures and potential sanctions, please consult our full code of conduct via Student
Portal>My Links>MySBE at https://intranet.maastrichtuniversity.nl.

Student Code of Conduct - Specific

General rules

(Finance) Students have a responsibility and are required to be aware of relevant faculty and university
policies and procedures concerning their enrolment and use of university facilities. This information can be
found among others on the Student Portal, the faculty web site and university web site.
(Finance) Students should treat all staff and other students with respect, courtesy and equity. Name calling,
swearing or rude language are not permitted.

Email communication and correspondence

Electronic mail or "email" is an official method for communication between students and staff because it
delivers information in a convenient, timely, cost effective, and environmentally sensitive manner.
All communications to staff must come from a student’s Maastricht University e-mail account.
Email etiquette

o Writing an email to staff is like writing a professional letter and (Finance) students should adopt an
appropriate language and style. Once a dialogue has been established, being less formal may be
appropriate. It is best to follow the lead of the staff member responding.

o Basic points to keep in mind:

Always include your full name and ID number

Start and end appropriately as if writing a formal letter e.g. Dear [Title, Surname] and Regards
..........
Indicate the Maastricht University name (course code, etc.) and issue in the Subject line of the
e-mail
Use professional language and clearly state your purpose
Check for punctuation, spelling and grammatical errors
Use capitals when appropriate, do not use SMS style text.

19
Tutorial groups & Lectures

Proper conduct during the tutorial meetings and lectures is expected.

o (Finance) Students should treat their tutor and fellow students with respect, courtesy and equity. Students
should be prepared for the tutorial.

o (Finance) Students have to be on time.

o No food or drinks are allowed during the tutorials.

o Active mobile phones will not be tolerated during tutorials. Mobile telephones should be switched off and
put away, (Finance) students should not make or answer calls or send text messages throughout a tutorial
or lecture.

o Students are assigned to tutorial groups by the Education Office, not by the course coordinator. When
registering for the course, students can indicate a preference for a certain time slot. This is no guarantee
that students will receive their preferred time slot. Switching of tutorial groups is not possible! No exceptions
will be made.

Exam inspection

Inspection is only possible after subscription. Subscription procedures will be made available by the course
coordinator. These procedures are binding.
A certain time will be allotted to the inspection. An answer key will be available during the inspection.
Students are not allowed to take the answer key with them or to make a copy in writing or otherwise.
The inspection should allow (Finance) students:

o To check whether the answer was correct, partially correct or wrong. In case of a fully correct answer
students should receive the points allocated to the particular question. In case of a wrong answer students
should receive zero point for the question. In case of a partially correct answer (including both calculation
and end result – as stated on the front page of the exam) the norm is determined by the block coordinator
and is not up for discussion during the inspection or at any other moment.

o To add up all assigned points to check whether the end grade communicated through the Student Portal
is consistent with your calculation.

o To compare an answer with the answer key to learn about mistakes made.

During the inspection the following is NOT allowed:

o Finance students are not allowed to make notes or to take the answer key with them or to make a copy in
writing or otherwise.

o Discuss/ complain about the contents of the course, the tutor etc. Use the official process within
Maastricht University to do so. For more information contact the SBE Information Desk.

20
 o Discuss/ complain about the contents and level of the exam. Use the official process within Maastricht
University to do so. For more information contact the SBE Information Desk.

o Ask about the details of the time of the re-sit and the contents of the exam during the re-sit. The time of
the re-sit will be communicated through the official channels. The same requirements apply for the re-sit as
for the first round. No further discussion of the contents of the re-sit exam will take place. Tutors have no
information about the re-sit exam.

(Finance) Students are not allowed in for inspection before their time slot starts, they are not allowed to
continue the inspection after their time slot is over.

Issues that should not be addressed to the course coordinator

Course coordinators and tutors do not have control over every aspect of education. For the following issues
students must check the Student Portal, contact the Information Desk in person or via AskSBE:

Time and location of the exams

Publication of exam results on the Student Portal
Score forms of multiple-choice or true-false exams
Assignment of students to tutorial groups
Location and timing of tutorial groups
Late registration for courses
My UM portal record in general

Consequences of violating these rules for Finance Students

Students who fail to adhere to behavioral standards may be subject to discipline. In general, in case of
inappropriate conduct of a (Finance) student the Finance Department’s staff reserves their right to inform the Board
of Examiners who will then decide on the appropriate consequences. Academic cheating, fraud or plagiarism will
always be reported to the Board of Examiners who will then decide on the appropriate consequences.

Tutorial groups

(Finance) Students who arrive unprepared or without any course material will be instructed to leave the
tutorial and not return to that tutorial.
(Finance) Students who arrive more than 10 minutes late for the tutorial will not be allowed to participate in
that tutorial, unless there are circumstances beyond one’s control.
(Finance) Students who violate the rules regarding mobile phones will be instructed to leave the tutorial and
not return to this tutorial.

Exam inspection

Failure to comply with the statements above during the inspection will result in a request to step out of the
office with a copy of the conditions for exam inspection. After reading the conditions the student is allowed

21
 back in, only if his/her time slot is still valid.

Global Citizenship Education and Competency Development

“The goal of Global Citizenship Education is to empower learners to engage and assume active roles, both locally
and globally, to face and resolve global challenges, and ultimately to become proactive contributors to a more just,
peaceful, tolerant, inclusive, secure, and sustainable world.” – UNESCO

Why Global Citizenship Education throughout our curricula?

One of the most important callings for education in our time is to guide your personal development as a student in
global citizenship to contribute meaningfully to perhaps the most serious, sweeping, and integrated set of
challenges humanity has ever known.

As a graduate, you will face converging socio-ecological crises that permeate virtually all facets of human life and
institutions, as well as the natural world. We also understand your need to find rewarding and well-compensated
work in a world fraught with economic and employment instability, inequity, social division, and conflict. So, what’s
our response?

Competence-based education for a better world

With Global Citizenship Education reflected in PBL tasks, assignments, study resources, and real-life
transdisciplinary challenges beyond the university, we aim to help you develop the required competencies
(knowledge, skills, and attitudes) to effectively navigate these unprecedented challenges—and to help you find your
own role and purpose how to make the world a better place. It doesn’t matter where we begin. We all start small
and grow.

Figure 1: Evolving framework for Global Citizenship Education at UM, listing knowledge elements, skills,
and attitudes (plus other characteristics). Note that the dimensions are not mutually exclusive: an element may fit
in more than one column.

22
These three pillars in Figure 1 mark the UM framework for Global Citizenship Education, which forms the
foundation underlying our educational programs, namely:

01 Global literacy/systems thinking is about understanding the complexity and uncertainty of our interrelated
world and learning how to approach its challenges, while becoming more empathetic towards different cultural and
historical perspectives and contexts.

02 Social responsibility can be seen as the perceived level of interdependence and social concern to others, to
society, and to the environment. It relates to your personal development, search for meaning, developing a sense of
purpose, and aspiration to contribute beyond the self.

03 Transformative engagement is about change agency, about translating your knowledge, attitudes, and skills into
actions by designing, implementing, and evaluating (evidence-based) innovative solutions to wicked problems in
co-creation with others.

We sincerely hope that through Global Citizenship Education, we will inspire you to initiate change within and
outside of this course, to spark new discussions surrounding global citizenship related topics that are close to your
heart, and to use your passion to drive positive change in whichever way you feel you can, and want to.

Always remember, a global citizen is a person developing an identity rooted in a particular community, but with a
sense of connection and responsibility for people elsewhere. We hope to inspire that shared responsibility within
you, and prepare you with the Global Citizenship competencies so that you may thrive in your personal and
professional life. Will you answer the call and become a change agent for a better, more socially inclusive,
environmentally sustainable, and equal world?

We all share that responsibility. The world depends upon you, on all of us. Let us start small. Let us grow together.
Let us change the world!

23
For more information visit: https://www.maastrichtuniversity.nl/global-citizenship-education/global-citizenship-
education

Support

An important aspect of being a student is figuring out your way of studying and dealing with (performance)
pressure, perhaps also mental health struggles. However, it is important to remember that no two people have the
exact same journey, but everyone has their own path. Along the way, it is possible that you will encounter certain
obstacles, but know that you should not be afraid to ask for help and support, even if you just want to talk. You can
start with talking to your peers who, no doubt, have similar experiences and struggles. However, there is also
additional help available within and outside SBE.

SBE Student and Career Counselling is a good place to discuss about personal, academic and career related topics.
Especially if you have a (mental) illness or if other personal circumstances affect your well-being and study, please
make sure to contact them timely. It is a confidential setting and, when necessary, the counsellor can refer you to
other support bodies, such as the Maastricht University psychologists
(https://www.maastrichtuniversity.nl/support/during-your-studies/student-guidance/psychological-support)
, student deans (https://www.maastrichtuniversity.nl/support/during-your-studies/student-guidance/um-student-
deans) or confidential advisors (https://www.maastrichtuniversity.nl/support/during-your-studies/student-
guidance/confidential-advisor-students) . If you want to find out more about them, do not hesitate to visit the
Intranet page of SBE Student and Career Counselling (https://intranet.maastrichtuniversity.nl/en/school-business-
and-economics-students/advice-support-and-counselling/sbe-student-career-counselling) (or via Student
Portal>My Links>MySBE>Advice, Support and Counselling>SBE Student and Career Counselling). It is possible to
make an appointment with them through their appointment system (https://sbe-scc.maastrichtuniversity.nl/).

If you are seeking psychological support, it is also possible to contact the Maastricht University psychologists. You
can find more information via Student Portal>My Links>MySBE>Advice, Support and Counselling>Student
Psychologists. You can book a Quick Psychological Referral via https://www.maastrichtuniversity.nl/quick-
psychological-referral.

Lastly, for any course related questions, tutors and course coordinators are there to help. Bring your issue to your
tutor first. If there is no resolution, course coordinators will provide the necessary support. For any study- or rule-
related issue, you can access https://esc.maastrichtuniversity.nl/. When you submit a message via this platform, it
will be matched to the office with relevant expertise to address your question.

Please remember: Studying sometimes means that you will struggle. However, it should not be suffering. Help is
here if you need it. Please do not hesitate to ask.

24
Module 1 - Introduction to Corporate
Governance & Financial Stakeholders
Learning Goals of Module 1
After successfully completing this module, students will have achieved the following learning goals and objectives:

Being able to measure shareholder wealth.

Understanding the agency view of corporate governance.
Being able to differentiate the roles of financial different stakeholders in the governance of the firm including
equityholders, debtholders and governments.

Preparation for Session 1

You should prepare for Session 1 on your own in advance, e.g. before the start of the session. This preparation
includes exploring the Canvas course, downloading the syllabus and the required literature, purchasing the articles
and cases from HBS and - importantly - completing task 1.1.

Session 1 – Refresher Tutorial: Administrative Issues &

Discussion of Task 1.1
During the first part of this opening tutorial, administrative issues such as the assignment of presentations to
teams will be dealt with. Thus, attendance of this tutorial is essential! Any student who misses this session will
not be assigned to a team yet.

In case that you still have questions after your preparation for this session 1, you can ask your tutor questions
about the course. Note that an example of a case write-up
($WIKI_REFERENCE$/pages/gefa0582266272a8902f40642f07a675c) is provided in Module 1.

During the second part of this session, you will refresh your knowledge of valuation together with your tutor. Please
note that you must prepare task 1.1 in advance. The tutor will guide the discussion but will not provide you with a
lecture on valuation.

Task 1.1: Valuation Refresher

You should refresh your prior knowledge of Valuation based on your bachelor finance courses or the optional
readings listed below. Consider at least the following related questions:

How can you value a company with the WACC method?

25
 How can you calculate free cash flows?
How can you calculate a company’s weighted average cost of capital?
What is the CAPM and how can it be used to calculate the company’s cost of equity? How does the
company’s cost of equity change when the company changes its leverage?

Optional refresher readings

Luehrman, Cost of Capital. Core Curriculum – Finance Series, 2017, Harvard Business School Publishing.
available for purchase from Harvard Business School Publishing

Berk and DeMarzo, Corporate Finance, 5th edition, Pearson, chapters 6, 7, 12, 18, 19.
available at UB as e-book
Fernandez, The magnitude and concept of the equity premium in 150 textbooks (July 16, 2011).
available at http://dx.doi.org/10.2139/ssrn.1898167
Fernandez, García de la Garza, and Acín, Survey: Market risk premium and risk-free rate used for 96 countries
in 2024 (March 10, 2024).
available at http://dx.doi.org/10.2139/ssrn.4754347

Example of case write-up

Please refer to the "Overview" section of this Canvas course for detailed instructions regarding the case write-up.

To illustrate these instructions, a case write-up from students in a prior academic year has been posted here
($WIKI_REFERENCE$/pages/gefa0582266272a8902f40642f07a675c) . It illustrates how a write-up should look
like, i.e. the fact that calculations for quantitative questions (question 2 for the Heinz case) should be clearly
presented and explained. The cover page has been removed to anonymise the write-up.

The write-up refers to a merger case - a topic that is no longer part of the course. The specific case questions are
as follows.

Review the H. J. Heinz M&A case and provide a written answer to the following questions.

1. Interests and strategies (maximum 5 pages):

Describe the activities of Nelson Peltz and the role he played in laying the groundwork for the acquisition by
Berkshire Hathaway and 3G.

Discuss the positions of various stakeholders including Heinz shareholders, management, employees and
citizens of Pittsburgh.

Discuss the go-shop process, explain why it may be necessary and list any potential risks of such a process.

Why are investment bankers involved in this transaction and what are their respective roles?

2. Valuation: Do you agree that the acquirers’ offer was fair from a financial perspective?

26
 What is Heinz worth? Provide a valuation using different valuation methods including discounted cash flows,
comparable companies and comparable transactions. First and for each valuation method, start with a
baseline valuation and make sure to clearly explain all data sources from the case, assumptions and
calculations. Second, provide alternative valuation scenarios. Finally, compare the different values that you
calculated and draw conclusions about the fairness of the deal.

What was the acquisition premium and what do you conclude from it regarding the fairness of the deal?

What was the market reaction to the acquisition announcement and what do you conclude from it regarding
the fairness of the deal?

3. Overall assessment – bringing together your prior analyses: Was it a fair deal for all stakeholders? (maximum 1
page)

Session 2 – Lecture: Course Opening

During this lecture, Professor Kleimeier will motivate the study of corporate governance and provide an overview of
the course. There are no required readings for this session.

As this is the first course in the MSc IB program at Maastricht University for most students, the lecture will be
followed by an informal get-together. This get-together is hosted by Dr. Rodrigues, the program leader for the MSc
IB Strategic Corporate Finance program.

Session 3 – Concept Tutorial: Discussion of Task 1.2

During this session, the assigned team will present task 1.2. All other students must be prepared for the discussion
of this task.

Task 1.2: Corporate Governance & Financial Stakeholders

Review the topic of Corporate Governance & Financial Stakeholders. To be prepared for the tutorial discussion
and/or presentation, consider at least the following questions:

What are the main mechanisms of corporate governance? From a conceptual perspective consider:
Which corporate governance problems arise between the company’s managers and the different
financial stakeholders?
Which mechanisms can solve or reduce these governance problems? Focus in your answer on
financial stakeholders and the topics discussed during the course (e.g. engagement by equityholders,
government ownership, banks as financial stakeholders, bankruptcy).
How has the COVID-19 pandemic affected companies with respect to their financial stakeholders and
governance?

Required readings

27
Coates and Shrinivasan, Corporate Governance. Core Curriculum – Finance Series, 2018, Harvard Business
School Publishing.
to be purchased from Harvard Business School Publishing
Gelter and Puaschunder, COVID-19 and comparative corporate governance. Corporation Law 46(3), 2020-
2021, 557-628.
while the authors consider financial and non-financial stakeholders, you should focus on financial
stakeholders as discussed in sections III, IV.A.1 and IV.A.2

28
Module 2 - Equity Investors as Stakeholders
Learning Goals of Module 2
After successfully completing this module, students will have achieved the following learning goals:

Understanding the role of institutional equity investors in corporate governance.

Understanding the governance tools that institutional equity investors have at their disposal.
Understanding institutional equity investor engagement and activism.
Understanding the effects that governance actions of institutional equity investors have on the company as
well as other financial stakeholders.
Understanding the practitioner’s side of investor engagement.

Session 4 – Concept Tutorial: Discussion of Task 2.1

During this session, the assigned team will present task 2.1. All other students must be prepared for the discussion
of this task.

Task 2.1: Engagement by Institutional Equity Investors

Review the topic of Engagement by Institutional Equity Investors. To be prepared for the tutorial discussion,
consider at least the following issues:

From a conceptual perspective, what is the role of institutional equity investors in corporate governance and
what are their governance tools of voice and exit?
From a practical perspective, what governance tools do institutional investors use? What are the governance
tools of engagement and activism?
What is the empirical evidence regarding the governance actions of different types of institutional equity
investors and their effects on the company?

Required readings

Borochin and Yang, The effects of institutional investor objectives on firm valuation and governance. Journal
of Financial Economics 126(1), 2017, 171-199.
Brav, Jiang, Partnoy and Thomas, Hedge fund activism, corporate governance, and firm performance. The
Journal of Finance, 63(4), 2008, 1729-1775.
excluding part D.3 (p. 1766-1770) which will be discussed in Task 2.2
Edmans, Blockholders and corporate governance. Annual Review of Financial Economics 6(1), 2014, 23-50.
available at http://faculty.london.edu/aedmans/BlockholderSurvey.pdf
only sections 1 and 2 are relevant
McCahery, Sautner and Starks. Behind the scenes: The corporate governance preferences of institutional
investors. Journal of Finance 71(6), 2016, 2905-2932.

29
Session 5 – Concept Tutorial: Discussion of Task 2.2
During this session, the assigned team will present task 2.2. All other students must be prepared for the discussion
of this task.

Task 2.2: Shareholder Engagement & Debtholders

Review the topic Shareholder Engagement & Debtholders. To be prepared for the tutorial discussion and/or
presentation, consider at least the following issues:

What are the effects of shareholder engagement and activism on debtholders?

Is there a wealth transfer between equity- to debtholders?
How and to what effect do banks use engagement and activism?

The authors of the required readings cite each other and relate their analyses to each other. Make sure to do the
same during the tutorial discussion and/or presentation.

Required readings

Brav, Jiang, Partnoy and Thomas, Hedge fund activism, corporate governance, and firm performance.
Journal of Finance, 63(4), 2008, 1729-1775.
Part D.3. only (p. 1766-1770)
Klein and Zur, The impact of hedge fund activism on the target firm’s existing bondholders. Review of
Financial Studies 24(5), 2011, 1735-1771.
Song and Wang, When banks become shareholder activists. Journal of Banking and Finance 153, 2023,
106895.
Sunder, Sunder, and Wongsunwai, Debtholder responses to shareholder activism: Evidence from hedge fund
interventions. Review of Financial Studies 27(11), 2014, 3318-3342.

Session 6 – Guest Lecture: Institutional Equity Investors in

Practice
Dr. Michael Viehs will talk about the engagement practices of institutional investors.

Michael Viehs is Global Head of Sustainable Investing at Partners Capital in London. Before joining Partners Capital
in 2022, he was responsible for intelligent proxy voting in Germany, corporate engagements on environmental,
social, and governance issues and for conducting research on sustainability and responsible investing at Hermes
EOS. He also held the positions of research director at the Smith School of Enterprise and the Environment at the
University of Oxford and visiting assistant professor at the School of Business and Economics of the Maastricht
University. He is currently a visiting professor at the University of Applied Sciences Upper Austria and a research
affiliate with the European Centre for Corporate Engagement. He is an alumni of Maastricht University with a BSc in
International Business Economics, an MSc in International Business and a PhD in Finance.

30
Details for this session will be announced during the course.

31
Module 3 - Creditors as Stakeholders
Learning Goals of Module 3
After successfully completing this module, students will have achieved the following learning goals:

Understanding the specific role of banks as financial stakeholders with concentrated debt ownership.
Understanding project finance (PF) and the governance role of banks in PF.
Understanding PF in a broader stakeholder context, i.e. the impact of PF on the host country and the
relevance of the Equator Principles.
Being able to value a project and assess its feasibility from the equity- and debtholder’s point of view.

Session 7 – Concept Tutorial: Discussion of Task 3.1

During this session, the assigned team will present task 3.1. All other students must be prepared for the discussion
of this task.

Task 3.1: Concentrated Debt Ownership by Banks in Project

Finance
Review the topic of Concentrated debt ownership by banks in project finance. To be prepared for the tutorial
discussion, consider at least the following questions:

What is project finance (PF)?

In general but also particularly with respect to the governance role of banks, how PF can lead to better
governance?
Consider PF in a broader stakeholder context: What is the impact of PF on the host country? What is the role
and impact of the Equator Principles?

Required readings

Esty, Sesia and Knoop, Equator Principles: An industry approach to managing environmental and social risks.
Harvard Business School, 2007.
to be purchased from Harvard Business School Publishing
Farrell, Principal-agency risk in project finance. International Journal of Project Management 21(8), 2003,
547-561.
Scholtens and Dam, Banking on the equator. Are banks that adopted the Equator Principles different from
non-adopters? World Development 35(8), 2007, 1307-1328.
Subramanian and Tung, Law and project finance. Journal of Financial Intermediation 25, 2016, 154-177.

32
Session 8 – Case Tutorial: Discussion of Task 3.2
During this session, the assigned team will present task 3.2. All other students must be prepared to discuss this
task. All teams must have prepared a solution to this task and submit this solution by 8.30 am (UTC+2) on the day
of the tutorial via the respective assignment in the Canvas course.

Assignment: Task 3.2: Case – Nava Bharat: Energy Solutions

for India
Review the Nava Bharat: Energy Solutions for India case and provide a written answer to the following questions:

1. Explain the benefits of project finance and the rationale behind the creation of NBEIL as a special purpose
vehicle (SPV) of the parent company, NBVL.
2. Comment on the significance of NBEIL’s cash flow waterfall mechanism.
3. Calculate the debt service coverage ration (DSCR) and internal rate of return (IRR) of the power project and
perform a sensitivity analysis on the key financial parameters: fuel expenses, plant load factor (PLF), interest
rate.
4. Evaluate NBEIL’s project by commenting on its managerial, technical, market, environmental and financial
aspects. Overall, it is wise to proceed to syndicate a term loan for the coal-fired power project?

33
Module 4 - Governments as Stakeholders
Learning Goals of Module 4
After successfully completing this module, students will have achieved the following learning goals:

Understanding the history of privatization in industrialized and developing countries.

Understanding the different forms of privatization and their relative advantages and disadvantages.
Understanding the effects of privatization on the economy, stock market and privatized firm.
Being able to value a to-be-privatized firm.

Session 9 – Concept Tutorial: Discussion of Task 4.1

During this session, the assigned team will present task 4.1. All other students must be prepared for the discussion
of this task.

Task 4.1: The Government as Financial Stakeholder &

Privatization
Review the topic of The Government as Financial Stakeholder & Privatization. To be prepared for the tutorial
discussion, consider at least the following issues:

Briefly summarize the history of privatization in industrialized and developing countries

Consider the pros and cons of privatization from the government’s perspective:
Why do governments want to privatize SOEs?
Do governments have to give up private benefits of control when they privatize SOEs?
How can governments privatize? Consider in particular share issue privatizations, direct asset sales,
and voucher privatization. Why would governments choose one over the other?
Review the empirical evidence: What are the effects of privatization on the economy, on the stock market, on
the privatized firms? Is restructuring an alternative to privatization?

Required readings

D'Souza, Megginson, and Nash, The effects of changes in corporate governance and restructurings on the
operating performance: Evidence from privatizations. Global Finance Journal 18, 2007, 157-184.
D'Souza and Nash, Private benefits of public control: Evidence of political and economic benefits of state
ownership. Journal of Corporate Finance 46, 2017, 232-247.
Estrin and Pelletier, Privatisation in developing countries: What are the lessons of recent experience? The
World Bank Research Observer 33(1), 2018, 65-102.
Lattanzio and Megginson, Can restructuring gains be sustained without ownership changes? Evidence from
withdrawn privatizations. Journal of Financial and Quantitative Analysis 56(4), 2021, 1476-1504.

34
 Megginson and Netter, From state to market: A survey of empirical studies on privatization. Journal of
Economic Literature 39(2), 2001, 321-89.

Session 10 – Case Tutorial: Discussion of Task 4.2

During this session, the assigned team will present task 4.2. All other students must be prepared to discuss this
task. All teams must have prepared a solution to this task and submit this solution by 8.30 am (UTC+2) on the day
of the tutorial via the respective assignment in the Canvas course.

Assignment: Task 4.2: Case - Aramco's Privatization and IPO

Dilemma: Timing and Valuation
Review the Aramco's Privatization and IPO Dilemma: Timing and Valuation case and provide a written answer to the
following questions:

1. What are the pros and cons of making government-owned Aramco a private company?
2. Is November 2019 the best time to list Aramco through an IPO?
3. Conduct a valuation of Aramco using different methods: discounted dividends, oil price metric and other
comparables, discounted cash flows.
For the oil price metric use EV/Reserves. For other comparables, focus on P/E, EV/Sales and
EV/EBITDA. Note that the absolute and relative enterprise values (EV) in Exhibit 5 are given in US$
millions.
For the discounted cash flow valuation, you need to make certain assumptions based on the
information given in the case.
Start with an simplified valuation based on the following assumptions: time horizon of cash
flows equals the life of proved reserves; production volume of 10.3 million daily barrels as in
2018 with a growth rate of 0%; oil price of $64.16 per barrel as forecasted for 2019; overall
production cost in line with exhibit 3; depreciation equal to capital expenditures so that free
cash flows are unaffected (e.g. disregard the tax effect of depreciation) and the change in
working capital is zero; 15% royalty rate in line with oil price; 50% tax rate in line with exhibits 4
and 7; all-equity financing and assume that betas in exhibit 6 are equity betas.
Provide sensitivity analyses for this simplified valuation by considering, for example, different
production volumes, oil prices or cost of equity. Think of what is important for Aramco! Make
sure to justify why your sensitivity analyses are reasonable given the case information.
4. (How) Should Prince Mohammed make the government-owned Aramco a private company and list it on a
stock exchange? Consider Prince Mohammed’s plan and questions as outlined in the Epilogue and support
your position with arguments derived from your analyses in questions 1 to 3.

You must attach a signed declaration of originality

(https://canvas.maastrichtuniversity.nl/courses/19799/files/4123956) to your case-write up.

35
Module 5 - Stakeholders & Financial Distress
Learning Goals of Module 5
After successfully completing this module, students will have achieved the following learning goals:

Understanding financial distress and bankruptcy.

Understanding the governance roles of creditors and governments during financial distress.
Understanding the pros and cons of enforcing creditor rights during financial distress.
Understanding the pros and cons of governments bail outs during financial distress.
Understanding how the COVID-19 pandemic has affected companies and their stakeholders.
Being able to assess the viability of restructuring a distressed firm including the investor’s point of view, e.g.
debtor-in-possession (DIP) financing and government financial support.

Session 11 – Concept Tutorial: Discussion of Task 5.1

During the first part of the session, the assigned team will present task 5.1. All other students must be prepared for
the discussion of this task.

Task 5.1: Creditors’ Role in the Resolution of Financial Distress

Review the topic of Creditors’ Role in the Resolution of Financial Distress. To be prepared for the tutorial discussion,
consider at least the following issues:

When is a firm in financial distress? What is bankruptcy?

How do the incentives of equity and debtholders change when the firm becomes financially distressed? In
other words: What agency problem dominates when the firm’s performance deteriorates – that is, when the
firm is in moderate financial distress but still far from bankruptcy? What agency problem dominates when
the firm is in severe financial distress and close to bankruptcy?
Should creditor rights be strictly enforced when the firm approaches financial distress or bankruptcy?
How has the Covid-19 pandemic affected firms and what role can creditors as financial stakeholders in
affected firms play?

Required readings

Didier, Huneeus, Larrain and Schmukler, Financing firms in hibernation during the COVID-19 pandemic.
Journal of Financial Stability 53, 2021, 100837.
Favara, Morellec, Schroth and Valta, Debt enforcement, investment, and risk taking across countries. Journal
of Financial Economics 123(1), 2017, 22-41.
Nini, Smith and Sufi, Creditor control rights, corporate governance, and firm value. Review of Financial
Studies 25(6), 2012, 1713-1761.

36
Session 12 – Concept Tutorial: Discussion of Task 5.2
During this session, the assigned team will present task 5.2. All other students must be prepared for the discussion
of this task.

Task 5.2: Government's Role in the Resolution of Financial

Distress
Review the topic of Governments’ Role in the Resolution of Financial Distress. To be prepared for the tutorial
discussion and/or presentation, consider at least the following issues:

How can governments bail out distressed firms? When answering this question, consider the following:
What policy tools do governments have at their disposal?
Briefly summarize what governments have been doing to support firms affected by the COVID-19
pandemic.
(How) Should governments bail out distressed firms? When answering this question, also consider the
following:
What lessons can we learn from the past regarding the current economic crisis arising from the
COVID-19 pandemic?
Are fire sales to private equity investors an alternative to government bail-outs?

Required readings

Jiang, Kim and Zhang, The effects of corporate bailout on firm performance: International evidence. Journal
of Banking and Finance 43, 2014, 78-96.
Megginson and Fotak, Government equity investments in coronavirus bailouts: Why, how, when? Journal of
Law, Finance, and Accounting 6(1), 2021, 1-49.
available at https://ssrn.com/abstract=3561282
Meier and Servaes, The benefits of buying distressed assets. Journal of Applied Corporate Finance 32(4),
2020, 105-116.
Meier and Smith, The COVID-19 bailouts. Covid Economics 83, 2021, 54-87.
available at https://cepr.org/system/files/publication-files/101435-
covid_economics_issue_83.pdf

Regarding the first question, you can also look at the article by Didier et al. (2021) which we discussed during the
previous task.

Session 13 – Case Tutorial: Discussion of Task 5.3

During this session, the assigned team will present task 5.3. All other students must be prepared to discuss this
task. All teams must have prepared a solution to this task and submit this solution by 8.30 am (UTC+2) on the day
of the tutorial via the respective assignment in the Canvas course.

37
Assignment: Task 5.3: Case - Latam Airlines and COVID-19:
Seeking Bankruptcy Protection in the United States
Review the Latam Airlines and COVID-19: Seeking Bankruptcy Protection in the United States case and provide a
written answer to the following questions:

1. What is the difference between filing for bankruptcy reorganization versus bankruptcy liquidation? Why did
Latam Airlines choose to file for bankruptcy protection through a reorganization rather than a liquidation
proceeding?
2. Why did Latam Airlines file for bankruptcy reorganization in the United States rather than in its headquarter
country Chile? Can the decision to file for bankruptcy protection outside Chile affect the long-term
development of the Chilean capital market?
3. The COVID-19 pandemic had a significant impact on the aviation industry due to travel restrictions and a
slump in demand among travelers. What were Latam Airlines’ greatest vulnerabilities, compared to other
airline companies, before the start of the pandemic?
4. Is Latam Airlines a viable company in the long term? What changes should Latam Airlines make to adjust to
the ‘new normal’ of the airline industry after the COVID-19 crisis?
5. If you were the chief investment officer of an international institutional investor, would you invest in Latam
Airlines through debtor-in-possession (DIP) financing? Does the DIP financing tranche A offer an attractive
risk-return trade-off? As an investor in tranche A would you feel that tranche C investors get a better deal?
6. In several countries around the world, governments provided financial assistance to their airlines. Do you
think the Chilean government should help Latam Airlines? Do you think the country has sufficient fiscal
capacity to offer financial assistance to the company?

You must attach a signed declaration of originality

(https://canvas.maastrichtuniversity.nl/courses/19799/files/4123956) to your case-write up.

38
Module 6 - Corporate Governance Debate &
Essay
Learning Goals of Module 6
After successfully completing this module, students will have achieved the following learning goals:

Being able to create, understand and reflect on a proposition, e.g. problem statement question, regarding
corporate governance and financial stakeholders.
Developing and evaluating arguments in favor as well as against a proposition.
Arguing in favor and against a proposition in a verbal debate.

Session 14 – Debate Tutorial: Corporate Governance Debate of

Task 6.1
During this session, newly-formed teams will debate a total of 3 problem statement questions as described in task
6.1.

Task 6.1: Corporate Governance Debate

During the debate, newly-formed teams will debate a total of 3 propositions which are phrased
as problem statement questions. Each team will be given one question in advance so that the
team can prepare for the debate based on the required literature:

Proposition 1: Are the Equator Principles a valuable and effective tool towards realizing
sustainable development goals?
Proposition 2: Compared to private sector solutions, is a government bailout of companies
the preferred and necessary response to economic crises?
Proposition 3: Should policy makers design a corporate governance system that strongly
relies on and facilitates shareholder engagement and activism?

During the debate, two teams will face each other and argue either in favor (yes) or against (no)
the respective question. The teams will be informed only at the start of the debate whether they
will argue against or in favor of the problem statement. All members of the team are expected
to actively participate in the debate. Slides are not allowed during the debate, the team
members are expected to speak freely without relying on notes or slides.

39
Each debate will take 25 minutes, is facilitated by the tutor and takes place in three stages: First,
5 minutes for each team to state its arguments. Second, 5 minutes for each team for rebuttal.
Finally, 5 minutes for direct arguments between the teams.

40
Module 7 - Examination
Information Regarding the Examination
The examination will take place during the exam period and resit period related to period 1.

As stated in the Assessment Rules in the Overview section, the examination will take the form of an individual,
closed-book exam with a duration of 2 hours.

Regarding the examination please also note:

The examination will consist of a number of open questions and sub-questions.

The examination will be held at the MECC (or another SBE exam location) and conducted via Testvision.
In Testvision, the number of possible points for each question will be indicated.
As stated in the Assessment Rules in the Overview section, the minimum requirement for the
examination is a grade of 5.5. This implies the following for the norm of the examination: In order to
achieve a grade of 5.5, a student must obtain at least 55.0% of the total possible points of the
examination.
The length of the student's answer (e.g. number of words) for each question or sub-question might be
restricted in Testvision.
Students will have access to Testvision's calculator during the exam.
The Testvision cover page of the exam on which presents the general instructions for the exam will be
posted in Module 7 of this Canvas course in week 7.
The examination will be based on the required literature. The articles included in the reference list plus the
three cases constitute the required literature of the course. In other words, the required literature is exam-
relevant.
The examination will be closed-book.
The course coordinator can decide to provide short parts of the required literature (for example: a
table or equation from an article, a case exhibit) as part of the examination in Testvision.

For the details regarding assessment rules, please refer to the Overview
($WIKI_REFERENCE$/pages/geb3691feeca3cb0397f63860d334f378) section in this Canvas course.

41
 Learning Resources

The articles included in the reference list plus the three cases constitute the required literature of the course.
Additional required literature can be assigned during the course.

In general, the literature is accessible through UB’s electronic journals and databases, i.e. EBSCOhost. If this is not
the case, an indication of how to access the article is provided in the respective module.

The cases as well as the articles by Esty et al. (2007) and Coates and Shrinivasan (2018) must be purchased from
Harvard Business School Publishing. Detailed information on how to purchase these materials is given below –
please note that the product ´Core Curriculum Finance Reading - Cost of Capital’ is optional reading for Session 1
and as such included in the course pack. Please note that simply copying these cases and articles from other
students without paying the copyright fee to HBS Publishing is a violation of copyright law!

Learning Resources: Lecture

The slides and recording of the opening lecture will be posted here.

Please note that the guest lecture will not be recorded.

Learning Resources: Reference List

Borochin and Yang, The effects of institutional investor objectives on firm valuation and governance. Journal of
Financial Economics 126(1), 2017, 171-199.

Brav, Jiang, Partnoy and Thomas, Hedge fund activism, corporate governance, and firm performance. The Journal
of Finance, 63(4), 2008, 1729-1775.

Coates and Shrinivasan, Corporate governance. Core Curriculum – Finance Series, 2018, Harvard Business School
Publishing.

Didier, Huneeus, Larrain and Schmukler, Financing firms in hibernation during the COVID-19 pandemic. Journal of
Financial Stability 53, 2021, 100837.

D'Souza, Megginson and Nash, The effects of changes in corporate governance and restructurings on the operating
performance: Evidence from privatizations. Global Finance Journal 18, 2007, 157-184.

D'Souza and Nash, Private benefits of public control: Evidence of political and economic benefits of state
ownership. Journal of Corporate Finance 46, 2017, 232-247.

42
Edmans, Blockholders and corporate governance. Annual Review of Financial Economics 6(1), 2014, 23-50.

Estrin and Pelletier, Privatisation in developing countries: What are the lessons of recent experience? The World
Bank Research Observer 33(1), 2018, 65-102.

Esty, Sesia and Knoop, Equator Principles: An industry approach to managing environmental and social risks.
Harvard Business School, 2007.

Farrell, Principal-agency risk in project finance. International Journal of Project Management 21(8), 2003, 547-561.

Favara, Morellec, Schroth and Valta, Debt enforcement, investment, and risk taking across countries. Journal of
Financial Economics 123(1), 2017, 22-41.

Gelter and Puaschunder, COVID-19 and comparative corporate governance. Journal of Corporation Law 46(3),
2021, 557-628.

Jiang, Kim and Zhang, The effects of corporate bailout on firm performance: International evidence. Journal of
Banking and Finance 43, 2014, 78-96.

Klein and Zur, The impact of hedge fund activism on the target firm’s existing bondholders. Review of Financial
Studies 24(5), 2011, 1735-1771.

Lattanzio and Megginson, Can restructuring gains be sustained without ownership changes? Evidence from
withdrawn privatizations. Journal of Financial and Quantitative Analysis 56(4), 2021, 1476-1504.

McCahery, Sautner and Starks, Behind the scenes: The corporate governance preferences of institutional investors.
Journal of Finance 71(6), 2016, 2905-2932.

Megginson and Fotak, Government equity investments in coronavirus bailouts: Why, how, when? Journal of Law,
Finance, and Accounting 6(1), 2021, 1-49.

Megginson and Netter, From state to market: A survey of empirical studies on privatization. Journal of Economic
Literature 39(2), 2001, 321-389.

Meier and Servaes, The benefits of buying distressed assets. Journal of Applied Corporate Finance 32(4), 2020,
105-116.

Meier and Smith, The COVID-19 bailouts. Covid Economics 83, 2021, 54-87.

Nini, Smith and Sufi, Creditor control rights, corporate governance, and firm value. Review of Financial Studies
25(6), 2012, 1713-1761.

Scholtens and Dam, Banking on the equator. Are banks that adopted the Equator Principles different from non-
adopters? World Development 35(8), 2007, 1307-1328.

Song and Wang, When banks become shareholder activists. Journal of Banking and Finance 153, 2023, 106895.

Subramanian and Tung, Law and project finance. Journal of Financial Intermediation 25, 2016, 154-177.

Sunder, Sunder and Wongsunwai, Debtholder responses to shareholder activism: Evidence from hedge fund
interventions. Review of Financial Studies 27(11), 2014, 3318-3342.

43
 Learning Resources: Articles and Cases from HBS

Harvard Business Publishing

Course Details: Corp Governance & Fin Stakeholders (EBC4052)

Dear Student,

You have registered for Corp Governance & Fin Stakeholders 2024/25 (EBC4052). This message explains how to
get the course materials you need for your class on the Harvard Business Publishing website.

Course link: https://hbsp.harvard.edu/import/1188702

You need to register on the site to create a user name if you do not already have one. Some course materials are
PDF documents and you can open them with Adobe Reader. eLearning materials include a link you can use to gain
access to them. You will have access to the course materials until January 11, 2025.

After you register, you can get to the coursepack at any time by doing the following:
1. Visit hbsp.harvard.edu (http://hbsp.harvard.edu) and log in.
2. Click My Coursepacks, and then click Corp Governance & Fin Stakeholders 2024/25

COURSE DETAILS

Professor: Dr. S. Kleimeier

Coursepack Name: Corp Governance & Fin Stakeholders 2024/25
Course Number: EBC4052
Course Start Date: Sept 1, 2024
Course End Date: Jan 11, 2025
Reference Code: 1188702

For technical assistance, please contact the Harvard Business Publishing Tech Help line at 617-783-7700); or email
[email protected].

Product Information:

Product #: 8293-PDF-ENG
Product Title: Core Curriculum Finance Reading - Cost of Capital

Product #: 5209-PDF-ENG
Product Title: Core Curriculum Finance Reading - Corporate Governance

Product #: 205114-PDF-ENG
Product Title: Equator Principles: An Industry Approach to Managing Environmental and Social Risks

44
Product #: W17479-PDF-ENG
Product Title: Nava Bharat: Energy Solutions for India

Product #: W20766-PDF-ENG
Product Title: Aramco's Privatization and IPO Dilemma: Timing and Valuation

Product #: W20767-XLS-ENG
Product Title: Aramco's Privatization and IPO Dilemma: Timing and Valuation, Spreadsheet Supplement

Product #: 321027-PDF-ENG
Product Title: Latam Airlines and COVID-19: Seeking Bankruptcy Protection in the United States

Learning Resources: Optional Readings for Enthusiasts

Here you can find additional references for the different topics covered in the course plus recent working papers on
the economic consequences of the COVID-19 pandemic. These references are NOT part of the required literature
but are posted here for students who wish to explore the topics further, for example in the context of their MSc
thesis.

Refresher

Luehrman, Cost of capital. Core Curriculum – Finance Series, 2017, Harvard Business School Publishing. Available
for purchase from Harvard Business School Publishing

Berk and DeMarzo, Corporate Finance, 5th edition, Pearson, chapters 6, 7, 12, 18, 19. Available at UB as e-book.

Fernandez, The magnitude and concept of the equity premium in 150 textbooks (July 16, 2011). Available at
http://dx.doi.org/10.2139/ssrn.1898167

Fernandez, Valuation and Common Sense (8h edition, April 2023). E-book available at
https://web.iese.edu/PabloFernandez/Book_VaCS/valuation%20CaCS.html

Fernandez, García de la Garza, and Acín, Survey: Market risk premium and risk-free rate used for 96 countries in
2024 (March 10, 2024). Available at http://dx.doi.org/10.2139/ssrn.4754347

Corporate Governance & Financial Stakeholders

Becht, Bolton and Röell, Corporate governance and control. Handbook of the Economics of Finance 1(A), 2003, 1-
109.

Cumming, Filatotchev, Knill, Reeb and Senbet, Law, finance, and the international mobility of corporate governance.
Journal of International Business Studies 48(2), 2017, 1-25. (introductory article to a special issue by the Journal of
International Business Studies on the role of financial and legal institutions in international governance, available at
https://link.springer.com/article/10.1057/s41267-016-0063-7)

45
Denis, Twenty-five years of corporate governance research . . . and counting. Review of Financial Economics 10,
2001, 191–212.

Denis and McConnell, International corporate governance. Journal of Financial and Quantitative Analysis 38(1),
2003, 1-36.

Fan, Wei and Xu, Corporate finance and governance in emerging markets: A selective review and an agenda for
future research. Journal of Corporate Finance 17(2), 2011, 207-390. (Introductory article to a special issue by the
Journal of Corporate Finance on Corporate Finance and Governance in Emerging Markets)

Gillan, Recent developments in corporate governance: An overview. Journal of Corporate Finance 12, 2006, 381–
402. (Introductory article to a special issue by the Journal of Corporate Finance on Corporate Governance)

Goergen and Renneboog (editors), Special Issue: Contractual corporate governance, European Corporate
Governance Institute (ECGI) symposium on contractual corporate governance. Journal of Corporate Finance 14(3),
2008. Available at http://www.sciencedirect.com/science/journal/09291199/14/3

Hart and Zingales, The new corporate governance. Business Law Review 1(1), 2022, 195-216.

Jiang and Kim, Corporate governance in China: A survey. Review of Finance, 2020, 733-772.

Karpoff, On a stakeholder model of corporate governance. Financial Management, 50(2), 2021, 321-343.

Koutoupis, Kyriakogkonas, Pazarskis and Davidopoulos, Corporate governance and COVID-19: a literature review.
Corporate Governance 21(6), 2021, 969-982.

Mehrotra and Morck, Governance and stakeholders. Handbook of the Economics of Corporate Governance 1, 2017,
637-683.

Pandey, Andres and Kumar. Mapping the corporate governance scholarship: Current state and future directions.
Corporate Governance: An International Review 31(1), 2023, 127-160.

Ormazabal, The role of stakeholders in corporate governance: A view from accounting research. Foundations and
Trends® in Accounting 11(4), 2018, 193-290. Available at http://dx.doi.org/10.1561/1400000053

Shleifer and Vishny, A survey of corporate governance. Journal of Finance 92(2), 1997, 737-783.

Sivaprasad and Mathew, Corporate governance practices and the pandemic crisis: UK evidence, Corporate
Governance 21(6), 2021, 983-995.

Equityholders as Stakeholders: Engagement and Activism by Institutional Equity Investors

Appel, Gormley and Keim, Passive investors, not passive owners. Journal of Financial Economics 121(1), 2016,
111-141.

Bebchuk, Brav and Jiang, The long-term effects of hedge fund activism. Columbia Law Review 115(5), 2015, 1085.

Bena, Ferreira, Matos and Pires, Are foreign investors locusts? The long-term effects of foreign institutional
ownership. Journal of Financial Economics 126(1), 2017, 122-146.

46
Boyson and Mooradian, Corporate governance and hedge fund activism. Review of Derivatives Research 14(2),
2011, 169-204.

Brav, Jiang and Kim, Hedge fund activism: A review. Foundations and Trends® in Finance 4(3), 2010, 185-246.
Available at http://dx.doi.org/10.1561/0500000026

Brav, Jiang and Pinnington. Shareholder monitoring through voting: New evidence from proxy contests. Review of
Financial Studies 37(2), 2024, 591-638.

Chen, Harford and Li, Monitoring: Which institutions matter? Journal of Financial Economics 86(2), 2007, 279-305.

Coffee and Palia, The wolf at the door: The impact of hedge fund activism on corporate governance. Annals of
Corporate Governance 1(1), 2016, 1-94.

Crane, Koch and Michenaud, Institutional investor cliques and governance. Journal of Financial Economics 133(1),
2019, 175-197.

Dasgupta, Fos and Sautner, Institutional investors and corporate governance. Foundations and Trends® in Finance,
12(4), 2021, 276-394. Available at http://dx.doi.org/10.1561/0500000056

Dey, Starkweather and White, Proxy advisory firms and corporate shareholder engagement. Harvard Business
School Accounting & Management Unit Research Paper Series No. 21-137, 2023. Available at
http://dx.doi.org/10.2139/ssrn.3871948.

Edmans and Holderness, Blockholders: A Survey of Theory and Evidence. Handbook of Economics of Corporate
Governance, 2017. Available at http://faculty.london.edu/aedmans/BlockholdersHandbook.pdf

Edmans, Levit and Reilly. Governance under common ownership. Review of Financial Studies 32(7), 2019, 2673-
2719.

Fich, Harford and Tran, Motivated monitors: The importance of institutional investors‫ ׳‬portfolio weights. Journal of
Financial Economics 118(1), 2015, 21-48.

Gantchev, The costs of shareholder activism: Evidence from a sequential decision model. Journal of Financial
Economics 107(3), 2013, 610-631.

Holderness, The myth of diffuse ownership In the United States. Review of Financial Studies, 2009, 1377-1408.

Kahan, Marcel, and Edward B. Rock. "Hedge funds in corporate governance and corporate control." In Gower (ed.),
Corporate Governance, 2017, 389-461.

Kempf, Manconi and Spalt, Distracted shareholders and corporate actions. Review of Financial Studies 30(5), 2016,
1660-1695.

Klein and Zur, Entrepreneurial shareholder activism: Hedge funds and other private investors. Journal of Finance
64(1), 2009, 187-229.

Lewellen and Lewellen, Institutional investors and corporate governance: The incentive to be engaged. Journal of
Finance 77(1), 2022, 213-264.

47
McNulty and Nordberg, Ownership, activism and engagement: Institutional investors as active owners. Corporate
Governance: An International Review, 24(3), 2016, 346-358.

Tonello and Gatti, Board-shareholder engagement practices: Findings from a survey of SEC-registered Companies.
Director Notes, 2019, December. Available at
http://www.shareholderforum.com/access/Library/20191200_TCB.pdf

Van der Elst and Lafarre, Shareholder stewardship in the Netherlands: The role of institutional investors in a
stakeholder-oriented jurisdiction. In Global shareholder stewardship: complexities, challenges and possibilities.
Cambridge University Press, 2022, 91-110. Available at http://dx.doi.org/10.2139/ssrn.3539820

Equityholders as Stakeholders: Individual Equity Investors

Aggarwal, Choi and Lee. The meme stock frenzy: Origins and implications. Southern California Law Revue 96, 2022,
1387-1416.

Goetzmann. Shareholder democracy, meet memocracy. Financial Analysts Journal 78(3), 2022, 5-8.

Sautter. Corporate governance through social media. Florida Law Review Forum, forthcoming in 2024. Available at
https://ssrn.com/abstract=4729597

Ricci and Sautter. Corporate governance gaming: The collective power of retail investors. Nevada Law Journal 22,
2021, 51-98.

Equity- and Debtholders as Stakeholders: Shareholder Actions' Impact on Debtholders

Aslan and Maraachlian, Wealth effects of hedge fund activism. Working paper, 2018. Available at
https://ssrn.com/abstract=993170

Buchanan and Kaya. Foundation ownership and creditor governance: Evidence from publicly listed companies.
Journal of International Financial Markets, Institutions and Money 93, 2024, 101982.

Chen, Jain and Huang. Proxy contests and debt contracting behavior: The interplay of managerial, shareholder and
creditor incentives. Journal of Business Finance and Accounting 50(9-10), 2023, 1867-1909.

Dahiya, Hallak and Matthys, Targeted by an activist hedge fund, do the lenders care? Journal of Corporate Finance
62, 2020, 101600.

Feng, Xu and Zhu, Caught in the crossfire: How the threat of hedge fund activism affects creditors. Journal of
Empirical Finance 64, 2021, 128-143

Jory, Ngo and Susnjara, The effect of shareholder activism on bondholders and stockholders. Quarterly Review of
Economics and Finance 66, 2017, 328-344.

Keswani, Tran, and Volpin, Institutional debt holder governance. Journal of Financial and Quantitative Analysis
56(6), 2021, 2103-2135.

48
Li and Xu, Hedge fund activism and bank loan contracting. Working Paper, 2011. Available at
http://dx.doi.org/10.2139/ssrn.1573217

Creditors as Stakeholders: Concentrated Debt Ownership by Banks in Project Finance

Benavides-Franco, Gómez and Pérez-Uribe, Determinants of project finance success for renewable energy.
Renewable Energy 211, 2023, 188-201.

Brealey, Cooper and Habib, Using project finance to fund infrastructure investments. Journal of Applied Corporate
Finance 9(3), Fall 1996, 25-38.

Byoun, Kim and Yoo, Risk management with leverage: Evidence from project finance. Journal of Financial and
Quantitative Analysis 48(2), 2013, 549-77.

Byoun and Xu, Contracts, governance, and country risk in project finance: Theory and evidence. Journal of
Corporate Finance 26, 2014, 124-144.

Contreras, Bos and Kleimeier, Self-regulation in sustainable finance: The adoption of the Equator Principles. World
Development 122, 2019, 306-324.

Conley and Williams. Global banks as global sustainability regulators? The Equator Principles. Law & Policy 33(4),
2011, 542-575.

Corielli, Gatti and Steffanoni, Risk shifting through nonfinancial contracts: Effects on loan spreads and capital
structure of project finance deals. Journal of Money, Credit and Banking 42(7), 2010, 1295-1320.

Dorobantu and Müllner, Debt-side governance and the geography of project finance syndicates. Journal of
Corporate Finance, 57, 2019, 161-179.

Esty, Why study large projects? An introduction to research on project finance. European Financial Management
10(2), June 2004, 213-224.

Esty, The economic motivations for using project finance. Working paper, 2003. Available at
https://citeseerx.ist.psu.edu/document?
repid=rep1&type=pdf&doi=f8abcb3b037f885b0380c3969aa829b73cadb61c

Gatti, Kleimeier, Megginson and Steffanoni, Arranger certification in project finance. Financial Management, Spring
2013, 1-40.

Gatti, Rigamonti, Saita and Senati, Measuring value-at-risk in project finance transactions. European Financial
Management 13(1), 2007, 135-158.

Guedes and Pinto. Pricing of project finance bonds: A comparative analysis of primary market spreads. Journal of
Corporate Finance 82, 2023, 102429.

Hainz and Kleimeier, Political risk, project finance, and the participation of development banks in syndicated
lending. Journal of Financial Intermediation 21(2), 2012, 287–314.

49
Hong, Lai and Karaca. Political institutions and global project finance loans. International Studies Quarterly 67(2),
2023, sqad025.

Kleimeier and Megginson, Are project finance loans different from other syndicated credits? Journal of Applied
Corporate Finance 13(1), 2000, 75-87.

Kleimeier and Versteeg, Project finance as a driver of economic growth in low-income countries. Review of
Financial Economics 19(2), 2010, 49-59.

Pinto, What is project finance? Investment Management and Financial Innovations 14(1), 2017, 200-210.

Pinto and Santos, The choice between corporate and structured financing: evidence from new corporate
borrowings. European Journal of Finance 26(13), 2020, 1271-1300.

Governments as Stakeholders: Government Ownership & Privatization

Beuselinck, Cao, Deloof and Xia, The value of government ownership during the global financial crisis. Journal of
Corporate Finance 42, 2017, 481-493.

Borisova, Brockman, Salas and Zagorchev, Government ownership and corporate governance: Evidence from the
EU. Journal of Banking and Finance 36(11), 2012, 2917-2934.

Borisova, Fotak, Holland and Megginson, Government ownership and the cost of debt: Evidence from government
investments in publicly traded firms. Journal of Financial Economics 118(1), 2015, 168-191.

Boubakri, Chen, El Ghoul and Guedhami, State ownership and debt structure. Review of Corporate Finance 1(1-2),
2021, 223-257.

Boubakri, El Ghoul, Guedhami and Megginson, The market value of government ownership. Journal of Corporate
Finance 50, 2018, 44-65.

Boycko, Shleifer and Vishny, A theory of privatization. Economic Journal, 1996, 309-319.

Chang and Boontham, Post-privatization speed of state ownership relinquishment: Determinants and influence on
firm performance. The North American Journal of Economics and Finance, 41, 2017, 82-96.

Chen, El Ghoul, Guedhami and Wang. Do state and foreign ownership affect investment efficiency? Evidence from
privatizations. Journal of Corporate Finance 42, 2017, 408-421.

Goyal, Jategaonkar and Muckley, Why do privatized firms pay higher dividends? Journal of Corporate Finance 60,
2020, 101493.

Howell, Jang, Kim and Weisbach. All clear for takeoff: Evidence from airports on the effects of infrastructure
privatization. National Bureau of Economic Research Working Paper No. 30544, 2022. Available at
http://dx.doi.org/10.3386/w30544

Jia, Huang and Man Zhang. Public governance, corporate governance, and firm innovation: An examination of state-
owned enterprises. Academy of Management Journal 62(1), 2019, 220-247.

50
Lazzarini and Musacchio, State ownership reinvented? Explaining performance differences between state‐owned
and private firms. Corporate Governance: An International Review 26(4), 2018, 255-272.

Li, Megginson, Shen and Sun, Privatization effect versus listing effect: Evidence from China. Pacific-Basin Finance
Journal 56, 2019, 369-394.

Li and Yamada, Political and economic incentives of government in partial privatization. Journal of Corporate
Finance 32, 2015, 169-189.

Megginson. Privatization and finance. Annual Review of Financial Economics 2(1), 2010, 145-174.

Megginson, Nash, Netter and Schwartz, Long run return to investors in share issue privatizations. Financial
Management 29(1), Spring 2000, 67-77.

Parker and Kirkpatrick, Privatisation in developing countries: A review of the evidence and the policy lessons.
Journal of Development Studies 41(4), 2005, 513-541.

Stakeholders & Financial Distress

Alpaslan, Green and Mitroff, Corporate governance in the context of crises: Towards a stakeholder theory of crisis
management. Journal of Contingencies and Crisis Management 17(1), 2009, 38-49.

Andrade and Kaplan, How costly is financial (not economic) distress? Evidence from highly leveraged transactions
that became distressed. Journal of Finance 53, 1998, 1443-1493.

Ayotte, Hotchkiss and Thorburn, Governance in Financial Distress and Bankruptcy. In: Wright, Siegel, Keasey and
Filatotchev (editors), Oxford Handbook of Corporate Governance, Oxford University Press, 2013.

Becker and Stromberg, Fiduciary duties and equity-debtholder conflicts. Review of Financial Studies 25(6), 2012,
1931-1969.

Bris, Welch and Zhu, The costs of bankruptcy: Chapter 7 liquidation versus Chapter 11 reorganization. Journal of
Finance 61, 2006, 1253-1303.

Chu, Diep-Nguyen, Wang, Wang and Wang. Shareholder-creditor conflict and the resolution of financial
distress. Review of Corporate Finance Studies, 2024, cfae005.

Ebeke, Miniane, Papi, Patnam, Saxegaard, Tulin and Valderrama. Solvency support for enterprises: key
considerations and preliminary lessons from European programs. IMF Special Series on COVID 19, 2021. Available
at https://www.imf.org/-/media/Files/Publications/covid19-special-notes/en-speical-series-on-covid-19-solvency-
support-for-enterprises.ashx

Franks and Torous, A comparison of financial recontracting in distressed exchanges and Chapter 11
reorganizations. Journal of Financial Economics 35, 1994, 349-370.

Gilson, John and Lang, Troubled debt restructurings: An empirical investigation of private reorganization of firms in
default. Journal of Financial Economics 27, 1990, 315-354.

51
Hoshi, Kawaguchi and Ueda, Zombies, again? The COVID-19 business support programs in Japan. Journal of
Banking and Finance 147, 2023, 106421.

Jebran and Chen. Can we learn lessons from the past? COVID‐19 crisis and corporate governance
responses. International Journal of Finance and Economics 28(1), 2023, 421-429.

Kalay and Tashjian, Is Chapter 11 costly? Journal of Financial Economics 84, 2007, 772-796.

Kang, James and Fabian, Real options and strategic bankruptcy. Journal of Business Research 117, 2020, 152-162.

Li, Liu and Chiang, Government intervention, leverage adjustment, and firm performance: Evidence from defaulting
firms. Pacific-Basin Finance Journal 76, 2022, 101885.

Li and Zhong, Investing in Chapter 11 stocks: Trading, value and performance. Journal of Financial Markets 16(1),
2013, 33-60.

Nurmi, Vanhala and Viren, The life and death of zombies – Evidence from government subsidies to firms. Bank of
Finland Research Discussion Paper No. 8/2020, 2020. Available at SSRN: https://ssrn.com/abstract=3601386

Olsen and Tamm, Corporate governance changes around bankruptcy. Managerial Finance 43(10), 2017, 1152-1169.

Pelosi, Rodano and Sette, Zombie firms and the take-up of support measures during Covid-19. Bank of Italy
Occasional Paper No 650, 2021. Available at https://marcopelosi.github.io/files/PRS_zombieQEF.pdf

Schivardi, Sette and Tabellini, Identifying the real effects of zombie lending. The Review of Corporate Finance
Studies 9(3), 2020, 569-592.

Weiss and Wruck, Information problems, conflicts of interest, and asset stripping: Chapter 11's failure in the case of
Eastern Airlines. Journal of Financial Economics 48, 1998, 55-97.

White, The corporate bankruptcy decision. Journal of Economic Perspectives, 1989, 129-151.

Wruck, Financial distress, reorganization, and organizational efficiency. Journal of Financial Economics 27, 1990,
419-444.

Economic consequences of the COVID-19 Pandemic*

Amore, Quarato and Pelucco, Family ownership during the Covid-19 pandemic. Journal of Banking and Finance 135,
2022, 106385.

Bigio, Zhang and Zilberman, Transfers vs Credit Policy: Macroeconomic Policy Trade-Offs During Covid-19. NBER
Working Paper No. w27118, 2020. Available at SSRN: https://ssrn.com/abstract=3597850

Carletti, Oliviero, Pagano, Pelizzon and Subrahmanyam, The Covid-19 shock and equity shortfall: Firm-level
evidence from Italy. The Review of Corporate Finance Studies 9(3), 2020, 534-568.

Cheema-Fox, LaPerla, Serafeim and Wang, Corporate resilience and response to COVID‐19. Journal of Applied
Corporate Finance 33(2), 2021, 24-40.

52
de Rugy and Leff, The case against bailing out the airline industry. Special Edition Policy Brief, 2020. Available at
SSRN: http://dx.doi.org/10.2139/ssrn.3571441

Elenev, Landvoigt and Van Nieuwerburgh, Can the COVID bailouts save the economy? Economic Policy, 37(110),
2022, 277-330.

Gurrea-Martínez, Insolvency law in times of COVID-19. Ibero-American Institute for Law and Finance, Working Paper
2/2020, 2021. Available at SSRN: http://dx.doi.org/10.2139/ssrn.3562685

Harmon and Ivashina, Managing the liquidity crisis. Harvard Business Review, 2020. Available at
https://hbr.org/2020/04/managing-the-liquidity-crisis

Morrison and Saavedra, Bankruptcy’s role in the COVID-19 crisis. Working paper, 2020. Available at SSRN:
http://dx.doi.org/10.2139/ssrn.3567127

Zhang and Zhang, COVID-19 and bailout policy: The case of Virgin Australia. Transport Policy 114, 2021, 174-181.

Zetzsche, Anker-Sørensen, Consiglio and Yeboah-Smith, Enhancing virtual governance: comparative lessons from
COVID-19 company laws, Journal of Corporate Law Studies 22(1) 2022, 115-150

* For more links to recent papers, go to the interdisciplinary research section at

https://www.ssrn.com/index.cfm/en/coronavirus/.

53