ADVANCED CORPORATE FINANCE - 1

The course Advanced Corporate Finance is one of the basic formative activities in the Course of Studies in Economics and Finance, Curriculum Finance. The objective of the course is to give to students advanced theoretical principles of corporate finance, but also applied tools to apply models in practice. The course concerns fundamental themes of corporate finance, relative to investment valuation, but also financing and dividend decisions, but providing advanced knowledge. The course will focus on how to determinate cash flows and the cost of capital – necessary for investment valuation – but also advanced topics such as real options. With regard to financing and dividend decisions, the course focus on the main theories on the financial structure and their implications in practice. 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, or also the risk manager.

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 corporate finance and know how to apply them in practice, to comprehend how in reality the investment, financing and dividend decisions work.

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.

Module 1
1.1 Corporate Finance and its Objectives
1.2 Measuring risk and the hurdle rate
1.3 Measuring investment returns
1.4 Investment interactions and real options

Module 2
2.1 Capital structure: an overview of the financing decisions
2.2 Capital structure: model and applications
2.3 The determinants of the dividend policy: theory and practice
2.4 Valuation and Growth

A. Damodaran, Applied Corporate Finance: A User's Manual, Fourth Edition.

The exam is a written exam and will last 60 minutes. The exam consists of three parts: one exercise, 5 multiple choice questions (no penalty for wrong answers) and one essay question. The grade of each part is out of thirty points, and the grade of the overall exam is an average of the grades achieved in each part.

The course in mainly organized in frontal classes. 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