FINANCIAL REPORTING AND ADVANCED CORPORATE FINANCE - 2

The course Financial reporting and Advanced Corporate Finance is one of the basic formative activities in the Course of Studies in Economics and Finance. The objective of the course (module 1 and module 2) is to give to students the fundamental principles of financial reporting and corporate finance, but also tools to apply these principles in practice. The course concerns fundamental themes of financial reporting and corporate finance, relative to investment valuation, financing and dividend decisions, mergers and acquisitions, and the analysis of the interaction between projects and of real options. The objective is to form students that will know how to apply theoretical models in reality, to provide them with the necessary tools to aspire to job positions such as the Chief Financial Officer of a company, or the financial analyst working for investment banks or consulting companies.

Attending and actively participating to classes, studying the textbook and the other suggested materials, including the real cases used during the course, will allow students to:
1. Knowledge and comprehension
• acquire advanced knowledge of fundamental models of financial reporting and corporate finance and know how to apply them in practice, to comprehend how in reality the investment, financing and dividend decisions work as well as the use of real options.

2. Ability to apply knowledge and comprehension
• master the techniques to determine firm expected cash flows and to calculate the cost of capital to discount cash flows
• identify the company optimal financial structure
• comprehend the consequences of the choices of dividend policies
• apply methods and tools acquired during the course to interpret the dynamics of corporate finance

3. Judgment ability
• critically evaluate company valuations like a financial analyst
• evaluate the sustainability of the firm financial structure and its equilibrium
• evaluate the effects of different dividend policies that the firm may choose

The main prerequisite is knowledge of financial and management accounting, even though the first part of the course (within the first module) will be devoted to summarise the basic knowledge of financial and management accounting (with particular regard to the balance sheet) that is necessary to understand financial reporting and advanced corporate finance themes treated in the other parts of the course.

Module 1: see [EM2085-1] FINANCIAL REPORTING AND ADVANCED CORPORATE FINANCE - 1

- Financial Reporting System
- Analysis of Principal Financial Statements
- Analysis of Inventories and Long-Lived Assets
- Analysis of Off-Balance-Sheet Assets and Liabilities

Module 2
- Measuring risk and the hurdle rate
- Measuring investment returns
- Working Capital Management
- Mergers and Acquisitions and Corporate Restructuring
- Investment interactions and real options
- Capital structure: an overview of the financing decisions
- Capital structure: model and applications, Analysis of Taxes, Analysis of Debt
- The determinants of the dividend policy: theory and practice
- Valuation and Growth

The division of the course content in the two modules should be considered tentative because, depending on the level of knowledge of the students enrolled in the class and on the pace kept during the course, some contents included in the second module of the course may be anticipated in the first module.

The textbook used will be a "Create" (Custom Publishing) dedicated to the course and titled "Financial Reporting and Advanced Corporate Finance".

The exam is a written exam and lasts 60 minutes. The exam consists of multiple choice questions and essay questions, that may contain exercises.

The course in mainly organized in frontal classes, even though they will probably be virtual and online. Classes combine fundamental principles of the subject with their practical application through exercises and real cases. All the material discussed in class will be available to students in Moodle.

English

written