CORPORATE FINANCE

The "Corporate Finance" course delves into the essential principles of finance and introduces students to various financial concepts. It emphasizes the significance of finance in both personal and corporate financial decision-making.
The main goal of the course is to provide students with a basic understanding of how to manage money in a company, being able to identify the solutions that allow its transformation into new market value. In this view, the financial function is not only in charge of the capital provision decisions but it also contributes to create the company competitive advantage, balancing capital provision with its efficient allocation.

In fact, the main educational goal of the course is to stress that the value of capital depends on the ability to generate operating cash flows in line with the risk-return expectations of all stakeholders. According to this perspective, the long-term equilibrium of the company can be achieved only if all stakeholders’ interests are satisfied, without discriminating or egoistically excluding some of them.
The course is structured in a manner that it starts from the very basics and then leaves the students at a level where they will be able to pursue more advanced finance courses.

More specifically, the main contents of the course will focus on the computation and interpretation of the historical (cash flow statement) and future (budget) cash flows, on the valuation of stocks and bonds, on the capital budgeting decisions and on the estimation of the company cost of capital. All these topics will be presented on a theoretical and practical basis, allowing students to develop the quantitative skills necessary to cope with the main corporate financial decisions.

•Learning fundamental principles of corporate finance, analyze historical financial data, predict future cash flows, and make capital provision and allocation decisions.
•Assess a corporate financial health and performance.
•How to apply valuation methods to determine asset/investment value using appropriate models.
•Use the relationship between expected return and risk of assets and portfolios to make sound investment decisions.
•Evaluate capital projects to determine their feasibility.
•Estimate how growth affects the need for external financing.

Basic understanding of financial accounting and mathematics' is desired.

Overview of Financial Management
Analysis of Financial Statements
Financial Planning and Forecasting
Time value of money
Capital budgeting decisions
Interest rates, bond valuation
Risk and rates of return, Capital Asset Pricing Model (CAPM)
Stock valuation
The capital structure decisions

Fundamentals of Financial Management. Eugene F. Brigham & Joel H. Houston. 15th Edition.

Secondary Texts :
Fundamentals of Corporate Finance. Stephen A. Ross, Randolph W. Westerfield & Bradford D. Jordan, 9th edition.

The exam consists of two parts: 10 multiple-choice questions (with no penalties for unanswered or incorrect responses) and a scenario-based questions. The exam duration is 1 hour.

The course is based on in-person classroom based lectures. All materials used during classes will be available to attending students through the Moodle platform.
Lectures combine the presentation of the basic principles in corporate finance with their practical application through exercises and business cases.

English

written