Tell us a bit about your background. Where are you from and how did you end up joining the faculty at the Gatton College?
Originally I’m from Princeton, NJ, but I did my undergraduate work at Chicago, worked in New York City, and then did a PhD at Florida. Gatton was my first job after finishing my PhD in 2006 and I’ve been here ever since.
That’s a long time. Have you seen things change at Gatton over time?
Definitely. I’ve seen new programs, a new building, and even new Deans. But even when things aren’t changing, one of the great things about being an academic is that every day is different. I work on new research or teach a new group of students.
You taught in our daytime MBA program for the first time this fall? How was that?
Yes. I love the MBA audience. It’s always a fun challenge to teach such an engaged audience with a wide range of backgrounds. There are MB/MBA, JD/MBAs, engineers and accounting folks as well as people with less quantitative backgrounds.
How do you keep such a diverse group engaged?
In most businesses, the finance group controls the resources, the money. Even smaller start-up will deal with a bank or investors. I try to communicate to my students that the basic language and tools of finance will allow them to be better advocates for themselves, their projects, and their employees. Plus, I rip examples from the Wall Street Journal every day before classes and tests so the students see how what’s in their textbook or my lecture relates to everyday business decisions or the broader economy.
Does this real-world focus for teaching carry over to your research activities?
Certainly, my research agenda focuses on the various ways firms manage risk and recently I’ve been exploring the large run-up in corporate cash. From the news you may have seen that U.S. non-financials are sitting on over $4 trillion dollars of cash. That’s a huge increase over the last two decades. The question is why. Cash provides excellent insurance during uncertain times – ensuring there is money to fund new investments and compete strategically. But what should executives – or my students – think when they see firms holding so much cash or read newspaper reports about the dramatic change in corporate cash?
In teaching corporate finance, the big topics are raising funds, making investments, and then deciding when and how much to payback to investors. So this recent work on corporate cash allows me to have a more nuanced discussion with my students on firms decision to retain cash for future investments versus returning money to investors as well as discuss how recent changes to the tax law may affect firms liquidity decisions.