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 diffentiated between attending and non-attending students.
For attending students, the exam will be composed as follows:
• written exam, worth 60% of the grade. Students must pass this part for the grade to be valid;
• group activity, worth 30% of the grade and consisting of a team project (3-5 students involved), whose details will be communicated via Moodle;
• individual activity, worth 10% of the grade, consisting of quizzes available on Moodle for a limited amount of time.
This way of testing students' preparation should contribute to foster learning and facilitate meaningful exchanges across all participants. The details about the individual and group activities will be provided via Moodle.

All attending students are required to take part in the class activities and in individual and group activities. All such activities are mandatory for attending students. All students that do not complete either the individual or the group activities by the deadline will be automatically considered non-attending students.

For non-attending students the individual and group activities are not mandatory. They must pass the written exam (equal to the exam for attending students) and after that an oral exam. Non-attending students must agree their status with me and be cleared by me to follow the alternative course modality before week 3 of the course.

The written exam (for both attending and non-attending students) is made up of 20 multiple-choice questions in 25 minutes. Each multiple-choice question is worth 1 point and no penalization will be applied for uncorrect answers.
During the exam, it is not possible to use notes, books, slides or any other material, cell phones or other devices. The exam verifies the general knowledge of the students over the course topics. To pass the student needs to have at least 12 points (then transformed on a 30-point scale). The exam can be taken during the formal exam dates only.

The final grade for attending students will be the average of all the required activities, provided that the written exam grade is at least equal to 18/30. The weighted average of the final grade uses the weights listed above. The student passes the exam if the average grade is greater or equal to 18.
The final grande for non-attending students will be the average between the written and the oral part.
The distinction will be awarded at the discretion of the instructor.

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

In cases of emergency due to Covid-19 teching and exams could undergo some changes, in order to safeguard students.

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