48144 - Corporate Finance

Learning outcomes

The aim of the course is to provide the tools to evaluate companies and industrial projects. The first part of the course is asset-side oriented and looks at how business strategy gives rise to financial needs and risk. The second part of the course is liability-side oriented and investigates for the optimal debt/equity ratio and the return for the investors. Overall, the course points out the relevant drivers for company valuation and allows the students to: - apply the main financial and relative methods of business valuation; - analyze the most frequently used financial instruments in business valuations; - understand the different business strategies and their impact on value.

Course contents

1. Introduction and Review of Basic Concepts (Present Value, Net Present Value (NPV), Valuation of Bonds and Stocks)

2. Investment Decisions using NPV

3. Estimating the Cost of Capital

4. Capital Budgeting

5. Capital Structure and Optimal Borrowing Policy

6. Corporate Valuation

Readings/Bibliography

Recommended textbook:  

Brealey R., Myers S. and F. Allen, Principles of Corporate Finance. Any edition is fine.

Teaching methods

Class lectures, exercises and discussion of relevant cases will be the primary method.

Assessment methods

Written exam.

Exams will last 90 minutes.

Exams will be made of two exercises (20pts) and 5 multiple choice questions (2pt each).

There is no penalty for wrong answers in multiple choices questions.

NOTE: Assessment methods may change due to COVID restrictions. Updates will be provided by the instructor.

Mark range:

• 18-19: knowledge of a very limited number of topics covered in the course and analytical skills that emerge only with the help of the teacher, expressed in an overall correct language;
• 20-24: knowledge of a limited number of topics covered in the course and ability to autonomous analysis only on purely executive matters, expression in correct language;
• 25-29: good knowledge of a large number of topics covered in the course, ability to make independent choices of critical analysis, mastery of specific terminology;
• 30-30 cum laude: excellent knowledge of the topics covered in the course, ability to make autonomous choices of critical analysis and connection, full mastery of specific terminology and ability to argue and self-reflection.

Teaching tools

Slides are provided by the instructor before the class.

Office hours

See the website of Aleksandra Baros