Student guide International Program A.Y. 2006/07

Corporate Finance 1
Aim of the course
1. To provide an introduction to the core concepts and key topic areas of corporate finance and to give a general framework of financial problems within the company;
2. to understand the relationship between firm and financial market with reference to investment and financing policies;
3. to identify the decision criteria for maximising corporate's capital structure;
4. to analyse the M&A activity and company's valuation methods.

Introduction to the foundations of corporate finance: role and objectives.

1. Financial statements analysis:
1.1 asset conversion cycle and Working Capital management
1.2 introduction to financial ratio analysis;
1.3 cash flow calculation and interpretation;

2. The investment decision:
2.1 time value of money;
2.2 actualization and capitalization;
2.3 capital budgeting tecniques: NPV, IRR.

3. The financial decision:
3.1 risk and return relationship. Portfolio Theory and Capital Asset Pricing Model: basics;
3.2 the cost of capital: cost of debt, equity and WACC;
3.3 the optimal capital structure: theory and empirical evidence;
3.4 the use of leverage: leveraged buyouts.

4. Basics of company's valuation:
4.1 the Mergers and Acquisitions market: an overview;
4.2 company's valuation techniques: Discounted Cash Flow analysis and Comparables analysis.

Only students attending the course will have the written exam. All others will take an oral exam. Incorrect English or spelling will not be penalised.
Reading list
Reading list:
- Brealey, R., Myers, S., Principles of Corporate Finance, Mc Graw Hill, 2000
Additional readings will be suggested during the course. Course overheads will be available on the Internet.