79852 - Crash Course in Corporate Finance

Learning outcomes

The main goal of the course is to develop the necessary knowledge  to understand and apply the fundamental principles that drive investment decisions and corporate financing. The course encompasses: assessment techniques, procedures and techniques of capital budgeting, portfolio diversification, capital structure, cost of capital. The course covers topics usually addressed in a basic corporate finance course and for this reason it is useful to provide the basis for more advenced education such as corporate finance, business valuation, corporate governance and risk management.

Course contents

Prerequisites
All lessons will be held in Italian, it is therefore necessary a good knowledge of the Italian language. However, since part of the additional study material is in English, the knowledge of the English language is helpful.

Course Program

• Introduction to Corporate Finance, the role of the financial manager, corporate objectives and corporate governance (Chapter 1, 4)
• Fundamentals of Financial Analysis, Reclassification of the Balance Sheet and Income Statement, Main Budget Indicators, Working capital(Chapters 2, 3)
• Investment decisions: The present value, the value of an annuity, the compound interest, the real and nominal rates (see section 4.5)
• Valuation of equity and bonds through discounted cash flows, price / earnings ratios (cap.6)
• VAN as the best criterion and methods other than VAN, rationing of capital and TIR (Chapter 7)
• Decisions with VAN (Chapter 8)
• Introduction to Risk and Performance, Measurement of Variability (Chapter 9.10)
• Portfolio Theory and CAPM (Chapter 10)
• Risk and Capital Balance (Chapter 11)
• Capital Budgeting Analysis and Simulations (Chapter 12)
• Financing decisions Financing decisions and efficiency of the capital market (Chapter 14)
• Equity securities and bonds (cap.15)
• The irrelevance of capital structure, the thesis of Modigliani and Miller (Chapter 18)
• Correct Measure of Financial Debt, Cost of Debt (cap.19)
• Interactions between investment and financing policies, weighted average cost of capital (Chapter 20)
• Debt financing, credit risk, rating and probability of default (Chapter 25)
• Other business finance issues, Theory and valuation of options and derivative products (ch.21,22 and dispensations)

Readings/Bibliography

Reference text

• R. Brealey, S. Myers, F. Allen, S. Sandri, Principi di Finanza Aziendale, Sesta Edizione, McGraw Hill Libri Italia, 2011.

  Il testo di riferimento per gli esercizi è:

• E. Bajo, S. Sandri, Finanza Aziendale. Temi d'esame, Seconda Edizione, Pitagora Editrice Bologna, 2007.

  Optional texts

• M. Massari, L. Zanetti, Valutazione - Fondamenti teorici e best practice nel settore industriale e finanziario. II Edizione, McGraw Hill Libri Italia, 2008
• A. Damodaran, Valutazione delle aziende. Apogeo, 2002
• R. Cesari, E. Susini, Introduzione alla Finanza Matematica. Concetti di base, tassi, obbligazioni. McGraw Hill Libri Italia, 2005
• R. Cesari, E. Susini, Introduzione alla Finanza Matematica. Mercati azionari, rischi e portafogli. McGraw Hill Libri Italia, 2005

  Optional texts for exercises

• S. Mengoli, Esercizi di Finanza, Seconda Edizione, Dupress, 2009

  Testi analoghi al testo di riferimento per l'approfondimento e confronto:

• S. A. Ross, R. W. Westerfield, J. F. Jaffe Finanza Aziendale. Il Mulino, 2005
• A. Damodaran Finanza Aziendale. Seconda Edizione, Apogeo, 2006

Teaching methods

Frontal lessons

Teaching tools

The case studies, the material for the exercises, the slides and any additional study material used during the lessons will be available on the personal website of the lecturer prior to any lecture.

Office hours

See the website of Antonio Arfè