FINANCIAL POLICIES AND M&A STRATEGIES-1

The goal of the course is to apply fundamental principles of corporate finance to real companies and demonstrate how investors evaluate and value firms, given the adopted financial policies. The perspective is the firm value maximization: the focus is on principles that guide corporate manager decisions on financing and investing. In detail, business decisions are classified into three groups: investment, financing, and dividend decisions. This course also takes into account the affect of ESG on firm valuation.
At the end of the course, students will be able to fully understand and apply the process of valuation that represents the standard activity of a security analyst in a broker house.

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 the cost of capital of firm in oder to discount the expected cash flows according to risk they embed
• 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
• evaluate the sustainability of the firm financial structure and its equilibrium
• evaluate the effects of different investment policies that the firm may choose

The main prerequisite is a robust knowledge of financial and management accounting and basic corporate finance.

• Debt e firm value: the effects of corporate and personal taxation
• Debt e firm value: the effects of agency and distress costs
• Debt e firm value: the term structure of debt
• Equity and firm Valuation/estimation of valuation parameters
• Portfolio performance evaluation
• Options in Corporate Finance: Extensions and application

Hillier, D., Ross, S., Westerfield, R., Jaffe, J., & Jordan, B. (2019). Corporate Finance, 4e. McGraw Hill.
Brigham, E. F., & Ehrhardt, M.C. (2020). Financial Management-Theory & Practice.
Levy, H., & Post, T. (2005). Investments. Pearson Education.
Aswath Damodaran, Applied Corporate Finance: A User's Manual – 4th Edition,
ISBN-13: 978-1-118-80893-1
Roncalli, T., 2022. Handbook of sustainable finance. Available at SSRN 4277875.

Supplementary study material - such as slides, case studies, and exercises - will be prepared and made available on Moodle.

The final grade will typically be based on a written examination. The written exam will consist of multiple-choice questions (MCQs) and two to three open-ended questions to be answered in English within 60 minutes. Some questions may require numerical examples as part of the answer.

Active participation in class is expected, including engagement in discussions and class quizzes/assignements, which will also be considered in the final evaluation.The final grade will take into account both theoretical and practical knowledge, as well as the ability to communicate that knowledge effectively.

written

The lecturer has a duty to ensure that the rules regarding the authenticity and originality of exam tests and papers are respected. Therefore, if there is suspicion of irregular conduct, an additional assessment may be conducted, which could differ from the original exam description.

The grading system (how the grades will be assigned) is the same for attending or non-attending students:
A. scores in the 18-22 range will be awarded in the presence of:
- sufficient knowledge and ability to understand applied in relation to the programme;
- sufficient ability to apply knowledge and understanding and judgment;
- sufficient communication skills, especially in relation to the use of specific language relating to the subject;
B. scores in the 23-26 range will be awarded in the presence of:
- good knowledge and ability to understand applied in relation to the programme;
- good ability to apply knowledge and understanding and judgement;
- good communication skills, especially in relation to the use of specific language relating to the subject;
C. scores in the 27-30 range will be awarded in the presence of:
- excellent knowledge and ability to understand applied in relation to the programme;
- excellent ability to apply knowledge and understanding and judgment;
- excellent communication skills, especially in relation to the use of specific language relating to the subject.

All the classes are based on a very practical approach thus widely using cases and real corporate experience but without offending sound scientific framework. Classes will be thus developed in a typical business-school approach. During each weekly cycle lessons will be intended to
- the former, to give a complete theoretical framework
- the second, to highlight the inner difficulties in practical application and practice
- the latter, to discuss a real case
Classes requires a strong relationship with the attendants that could be encouraged by the joint attendance of classes by guest attendants from real corporation, professional and financial intermediaries. Attendants are thus suggested to read in advance the readings for the specific lessons according to the analytical syllabus that will be available a few days before classes begin.