Student guide Facoltà di Economia A.A. 2007/08

1.   To provide an introduction to the core concepts and key topic areas of corporate finance and to give 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.

 

1.   To give a detailed knowledge on the use and characteristics of debt and equity financial instruments;

2.   to identify main financial markets, focusing in particular on lending market, securities market and private equity market;

3.   to introduce the most important institutions in financial markets.

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.

 

1.     Financial institutions:

1.1   banks;

1.2   thrift institutions and finance companies;

1.3   investment companies;

1.4   insurance companies;

1.5   pension funds;

1.6   investment banking;

1.7   venture capital and private equity institutions;

1.8   investment trusts and other funds;

1.9   regulation of financial institutions.

 

2.     Commercial banks:

2.1   commercial bank operations;

2.2   bank management.

 

3.     Financial markets:

3.1   money markets;

3.2   bond markets;

3.3   mortgage markets;

3.4   equity markets;

3.5   IPO.

The exam is oral and takes place at the end of the course. Incorrect English or spelling will not be penalised.

Only students attending the course will have a written exam for the first part and a final oral exam for the second one.

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 website.