FINANCING HIGH GROWTH FIRMS

The course focuses on the inner topics that corporation and managers must deal with in using capital along with the main solutions that allow using it in order to create new value. Thus, financial management tools instructed in the classes are not simply referring to funding practices but to the entire funding-to-investing cycle in order to increase the actual competition of the firm. The main target of the course is to transmit the ixdea that the value generating process in mainly based on the true prospective of generating expected cash flows. Such cash flows must be sufficiently high to satisfy the threshold levels defined by the degree of the risk perceived in investors' expectations. According to this approach the long term competitiveness of the corporation can be also sustained by the adoption of financial policies focused on satisfying the expectations of all investors, avoiding short term approaches intended to privilege specific classes of investors in the access of the cash flows to the firm and so creating agency costs charged over the firm's economics.

By attending the course you will chiefly acquire a return-to-risk framework to carry on corporate decisions, chiefly those related to managerial finance. Theoretical frameworks concerning the risk assessment inside the financial markets will be provided along with description and use of the key risk indicators, such as betas. Practices and pitfalls in running a sound financial diagnose of the firm will be given, along with a practical view of corporate cash flows projections and expectations. Investments apprisal techniques such as net present value will be illustrated both at theoretical and applied level. You will learn how to configurate and estimate the corporate cost of capital by mixing up equity and debt capital.

Basics of financial reporting

The course is focused on the following five topics:
1. Historical and future cash flows dynamics and their determinants
2. Short and long-term financing instruments: stocks, bonds and other financing instruments
3. Capital budgeting techniques: investing to create value for all stakeholders
4. Non-financial capital budgeting techniques: the financial compatibility
5. The capital structure puzzle and the cost of capital

Watson, Head, Mantovani, Rossi. Corporate Finance. Principles and practice in Europe, Pearsons, Milano, Ed. 2016 in English, e-book

The exam will be made of two parts: a personal or individual assignment (40% of the final grade) and a written exam (60% of the final grade), in which students will have to prove their knowledge of both theoretical and practical topics of the course. The grade of the written exam will be obtained by answering questions (both multiple choice and open) and solving a practical exercise. Each exam must be completed within 60 minutes.
(Potential variations due to the Covid-19 emergency will be promptly communicated)

The course consists of 6 hours per week, which amount to 30 hours in total. For each of the five topics of the course, three classes will be held in order to learn: (i) the main theoretical subjects; (ii) the best practice; (iii) the actual application through mini-cases and practical examples.

English

written