At the end of the course students will be able to:

  •  know the main financial theory literature;

  •  identify the role of financial function, its relationship with other corporate functions, the main operational objectives of its business;

  •  identify relationships between corporate finance, markets and financial institutions;

  •  use some operating evaluation and analysis tools, typical of the financial function (investments evaluation, financial ratios and DuPont scheme, financial and operating leverage);

  •  understanding of some important theoretical issues scope (relationship between risk and return, the agency problem and signaling);

  •  use further operating evaluation and analytics tools, typical of the financial function (cash flows analysis, financial statement, firm valuation);

  •  assess the suitability of capital structure, minimizing cost of capital;

  •  identify the most efficient combinations of investment and financing choices;

  •  use financial planning operating tools (business plan, financial planning models and cash budgeting).

Course outline:
PART I
1. Introduction to corporate finance;
2. What is corporate finance and the role of financial manager;
3. The goal of financial management;
4. Corporate governance;
5. The agency problem and the control of corporation;
6. Valuation and capital budgeting: balance sheet analysis, reclassification, financial statement and cash flows;
7. Present value and cash flows;
8. Valuation: the multi-period case (compounding period, annual interest rate, annuity);
9. Bonds, stocks and firm valuation;
10. Net present value and other investment rules (the payback period method, internal rate of return, management perspective);
11. Capital investment decisions: incremental cash flows, sunk costs and opportunity costs;
12. Risk, return and their valuation.

PART II
13. Risk and return: the Capital Asset Pricing Model;
14. Expected return, variance and covariance: the Beta formula;
15. Factor models: the Arbitrage Pricing Theory;
16. Risk, cost of capital and capital budgeting;
17. Cost of capital, estimation of Beta and WACC;
18. Financing choices and market efficiency: foundations of market efficiency and the different types of efficiency;
19. Long-term financing: stocks, dividends, long-term corporate debt and interests;
20. The capital structure and dividends policy: maximizing firm value versus maximizing stockholder interests;
21. Financial leverage and firm value: Modigliani and Miller;
22. Capital structure: limits to the use of debt;
23. Financial distress and agency costs;
24. Firm growth and the pecking-order theory;
25. Valuation and capital budgeting for the levered firm;
26. Dividends and other payouts.

None.

PART I
1. Introduction to corporate finance;
2. What is corporate finance and the role of financial manager;
3. The goal of financial management;
4. Corporate governance;
5. The agency problem and the control of corporation;
6. Valuation and capital budgeting: balance sheet analysis, reclassification, financial statement and cash flows;
7. Present value and cash flows;
8. Valuation: the multi-period case (compounding period, annual interest rate, annuity);
9. Bonds, stocks and firm valuation;
10. Net present value and other investment rules (the payback period method, internal rate of return, management perspective);
11. Capital investment decisions: incremental cash flows, sunk costs and opportunity costs;
12. Risk, return and their valuation.

PART II
13. Risk and return: the Capital Asset Pricing Model;
14. Expected return, variance and covariance: the Beta formula;
15. Factor models: the Arbitrage Pricing Theory;
16. Risk, cost of capital and capital budgeting;
17. Cost of capital, estimation of Beta and WACC;
18. Financing choices and market efficiency: foundations of market efficiency and the different types of efficiency;
19. Long-term financing: stocks, dividends, long-term corporate debt and interests;
20. The capital structure and dividends policy: maximizing firm value versus maximizing stockholder interests;
21. Financial leverage and firm value: Modigliani and Miller;
22. Capital structure: limits to the use of debt;
23. Financial distress and agency costs;
24. Firm growth and the pecking-order theory;
25. Valuation and capital budgeting for the levered firm;
26. Dividends and other payouts.

The teaching material prepared by the lecturer in addition to recommended textbooks (such as for instance slides, lecture notes, exercises, bibliography) and communications from the lecturer specific to the course can be found inside the Moodle platform › blended.uniurb.it

Case study exercises.
Teaching material made available by lecturer can be found inside the Moodle platform (blended.uniurb.it), together with other supporting activities.

Teaching

Lectures, preparation and discussion of case studies.

Attendance

ERASMUS students are held to prepare the examination by studying the entire provided material (attending only), recommended books are required if not attending. Examination will be carried out in Italian language. Other exam preparation and passing modalities are not allowed.

Course books

Hillier, Ross, Westerfield, Jaffe, Jordan, Corporate Finance, McGraw-Hill Education, 2nd Edition. Chapter 8 not included (ISBN Code 978-88-386-6875-3)
The book will be integrated with professor’s installments about financial statement and net working capital.

Assessment

A final written test about both theoretical knowledge and a case study. The case study analysis is fundamental to assess the comprehension level of the main topics of corporate finance management. Failing case study analysis implies not to pass the exam and, consequently, the need to take it one more time.

Disability and Specific Learning Disorders (SLD)

Students who have registered their disability certification or SLD certification with the Inclusion and Right to Study Office can request to use conceptual maps (for keywords) during exams.

To this end, it is necessary to send the maps, two weeks before the exam date, to the course instructor, who will verify their compliance with the university guidelines and may request modifications.

Teaching

Lectures, preparation and discussion of case studies.

Attendance

ERASMUS students are held to prepare the examination by studying the entire provided material (attending only), recommended books are required if not attending. Examination will be carried out in Italian language. Other exam preparation and passing modalities are not allowed.

Course books

Hillier, Ross, Westerfield, Jaffe, Jordan, Corporate Finance, McGraw-Hill Education, 2ndEdition. Chapter 8 not included (ISBN Code 978-88-386-6875-3)
The book will be integrated with professor’s installments about financial statement and net working capital.

Assessment

A final written test about both theoretical knowledge and a case study. The case study analysis is fundamental to assess the comprehension level of the main topics of corporate finance management. Failing case study analysis implies not to pass the exam and, consequently, the need to take it one more time.

Disability and Specific Learning Disorders (SLD)

Students who have registered their disability certification or SLD certification with the Inclusion and Right to Study Office can request to use conceptual maps (for keywords) during exams.

To this end, it is necessary to send the maps, two weeks before the exam date, to the course instructor, who will verify their compliance with the university guidelines and may request modifications.