95624 - Fundamentals of Corporate Finance

Learning outcomes

The aim of this course is to provide students with a set of analytical tools to understand how corporations structured and managed financial decisions. Companies face two broad financial questions: What investments should the firm make? And how should a firm raise money to finance those investments? At the end of the course, students can: (a) make investment decisions based on the net present value rule; (b) understand how much should the firm borrow; (c) calculate the opportunity cost of capital in a framework of the risk and return market model.

Course contents

1. Introduction to finance and financial system
2. Financial Statement Basics, Financial Ratios
3. Time Value of Money—the mathematics of finance
4. Bonds: characteristics and valuation
5. Stock: characteristics and valuation
6. Capital budgeting using Net Present Value (NPV) and IRR
   
7. Introduction to Risk and Return and Portfolio Theory
8. Capital Asset Pricing Model and the cost of capital
   
9. Financing and corporate valuation methods

Readings/Bibliography

• Brealey, Richard, A., and Stewart C. Myers, Sandro Sandri, Principles of Corporate Finance, latest edition, Irwin McGraw-Hill
  
  The following textbook would also work

• Principles of Managerial Finance, Global Edition, 16e (2022), for Zutter and Smart

Teaching methods

1- Classes by the professor explaining the contents of the course.

2- Applying finance and valuation to real-world cases

3- Excel lab to practice financial modeling

Assessment methods

The evaluation process

A mandatory written exam: multiple-choice questions and exercises

An optional practical case study: Valuation of a listed company.

To take the exam, you must have previously registered according to the rules and deadlines specified in the ALMAESAMI procedure (https://almaesami.unibo.it/).

Scoring grid:

• 18-23: sufficient preparation and analytical skills on a limited number of topics covered in the course.
• 24-27: adequate preparation and analytical skills but with some limitations; good operational skills, even if not particularly articulated.
• 28-30: very good knowledge of many topics covered in the course; good operational and critical skills.
• 30L: excellent and exhaustive knowledge of the topics covered in the course; critical analysis and connection skills.

Students are not allowed to use notes or books.

The final mark is expressed out of 30.

Teaching tools

Slides, papers, books, teaching cases.

Office hours

See the website of Murad Harasheh