A83152 Corporate Finance

At the end of the course the student will be able:

1. To analyse the core concepts of corporate finance and the relationship with the other corporate areas;
2. To design investment and financing policies;
3. To identify the decision criteria for maximizing corporate’s capital structure;
4. To carry on an M&A activity and to use company’s valuation methods;
5. To identify the main financial sources for a firm, focusing on bank’s activity.

At the end of the course the student will gain knowledge about the foundations of corporate finance, the optimal capital structure, cash management and financing choices, the time value of money and the company valuation techniques.

Financing policies are fundamental for firms in every step of their life cycle (development, change or crisis). Financing activity, therefore, must be continuous and systematic. In order to identify the best financing and investment policies, to take Working Capital decisions and to be able to carry on an M&A activity, course will provide appropriate coverage of the following topics:

1. Financial statements analysis, asset conversion cycle and Working Capital management;
2. Financial ratio analysis and cash flow calculation and interpretation;
3. The investment decision, time value of money, actualization and capitalization;
4. Capital budgeting techniques: NPV and IRR;
5. The financial decision, risk and return relationship, Portfolio Theory and Capital Asset Pricing Model;
6. The cost of capital: cost of debt, equity and WACC;
7. The optimal capital structure: theory and empirical evidence;
8. Basic of company’s valuation and techniques (Discounted Cash Flow analysis and Comparables analysis), an overview of Mergers and Acquisitions market;
9. Enterprises and financial institutions: banks and commercial bank operations.

The aim is to provide students thorough knowledge of these issues, presenting characteristics, functioning, data and exercises.

The first part of the course (Sessions 1-8) focuses on financial statement analysis (1-4) and the financing decision (5-7). Attending students can take the mid-term written exam at Session 8. Concerning the second part (Sessions 9-15), the topics covered are the investment decision (9-10) and basic of company’s valuation (11-12). Attending students that took the first exam (mark at least equal to 16/30) can take the second written exam during the last session.

Course overheads will be published on the website of the course on “my.liuc.it”.

Attending students can take the mid-term written exam. They can take the second written exam only if the mark of the first one is at least equal to 16/30. Attending students, whose mark in the mid-term written exam is not sufficient, have to take a global oral exam. It is possible to take global oral exam at the last session, during the second written exam. Students that don’t pass second written exam have to take a global oral exam.