30017 - FINANZA AZIENDALE / CORPORATE FINANCE
Classes 31 and 32 are reserved to exchange incoming students
Per la lingua del corso verificare le informazioni sulle classi/
For the instruction language of the course see class group/s below
Class group/s taught in English
Lezioni della classe erogate in presenza
Students attending this course should be familiar with the basics of mathematics, financial mathematics and accounting. In particular, students should have reasonable knowledge of the basics in financial mathematics such as the time value of money, annuities and perpetuities; basics in accounting such as being able to read information contained in balance sheets, income statements, cash flow statements.
The course covers essential corporate finance topics such as financial analysis, working capital management, capital budgeting decisions, and capital structure choices. The course also provides a brief introduction to mergers and acquisitions (M&A) transactions. The objective of the course is to introduce students to the world of corporate finance, providing them with the tools to understand both the main theoretical models and their fundamental applications in the business environment. To this end, the teaching model alternate theoretical sessions, in which modern finance theory models are exposed and commented with continuous references to the most recent economic-financial news, with sessions dedicated to case studies and guest speakers.
Part One - Financial Analysis:
- The objectives of corporate finance and the foundations of value creation processes.
- Analysis of business performance from a financial point of view.
- Financial planning in the short and long term: from the cash budget to the financial plan.
Part Two - Working Capital Management:
- Working capital: size, relevance, and management approaches.
- Management of account receivables and customer relations; the impacts on financial requirements and profitability.
- Management of working capital and the relationships with suppliers.
Part Three - Capital Budgeting Decisions:
- Investments: introductory aspects and evaluation criteria of their economic convenience.
- Methods of constructing the relevant cash flows in the valuation.
- Management of uncertainty in capital budgeting decisions.
Part Four - Estimating the Cost of Capital:
- Main theories and the relationship between financial structure and cost of capital.
- Profiles and analysis tools in financing choices.
- Estimating the cost of equity from a business perspective.
- The weighted average cost of capital, its uses, and limits.
Part five: Introduction to Corporate Valuation and M&A:
- Introduction corporate valuation: methods and logic.
- Introduction to M&A.
- Explain the logic for the analysis of business results.
- Describe the short and medium-long term financial planning tools.
- Illustrate the methods of managing the company's working capital.
- Summarize the defining concepts of capital budgeting.
- Define the main methodologies for evaluating corporate investment projects.
- Describe the components of the corporate financial structure.
- Explain the costs and benefits of the different sources of funding.
- Illustrate the main issues connected with M&A transactions.
- List and describe the main methodologies for estimating the company value.
- Interpret the company's results and their sustainability, critically.
- Compare company performance with the competitors' results.
- Use short and medium-long term financial planning tools to evaluate the coherence between strategic and financing plans.
- Apply the main methods for evaluating investment projects.
- Understand and apply risk management logic and tools.
- Interpret financial structure choices and optimization strategies in raising capital.
- Analyze costs and benefits associated with different sources of funding.
- Use the main methods for business valuation.
- Face-to-face lectures
- Guest speaker's talks (in class or in distance)
- Exercises (exercises, database, software etc.)
- Case studies /Incidents (traditional, online)
- Group assignments
Along with traditional teaching sessions, which introduce the theoretical concepts of Corporate Finance, the course relies on other teaching methods:
- Guest speakers: managers and experts will discuss topics developed during the lectures integrating a practical viewpoint into the theories of Corporate Finance and presenting the significant financial communication issues in a company, the investment decisions and financial markets, and the role of financial institutions.
- Exercises: in addition to the theoretical lectures, exercise sessions are provided to carry out additional exercises and actively discuss the cases in the class.
- Case study analysis: use of business cases to apply the significant theoretical concepts developed in the course to real-life situations. Students are required to read and analyze the business case before the discussion in class.
- Group work: students can, although not required, develop group work on economic-financial analysis, planning and management, and evaluation of investments. The list of companies from which to choose is identified and provided by the course Professors.
|Continuous assessment||Partial exams||General exam|
Even if there is no attendance recording, attending students should regularly follow and actively participate in the Course.
- Attending students can take two intermediate exams in written form, composed of one exercise and multiple-choice questions. As detailed below, for those attending, it is also possible to take a general exam.
- The exams are designed to verify the theoretical framework of the Course and the practical tools of financial analysis, financial planning, capital budgeting processes, financial structure decisions, and business valuation.
- Attending students have the right (not the obligation) to participate in group or individual work on topics communicated by the Professors in a class. Group work is evaluated out of thirty, and the student can decide whether to accept the grade obtained in the group or individual work. If the student accepts the grade, the score reported in the group or individual work accounts for 20% of the overall grade.
- Group or individual work aims to verify the student's ability to carry out financial analysis, compare the significant results with the reference market, and interpret the results critically.
Attending students can decide to carry out:
- Two intermediate tests: in this case, 80% of the final grade depends on the results of the midterms (40% on the first intermediate exam; 40% on the second intermediate exam) and 20% on the group or individual work grade. If the attending student decides to reject the groupwork result, the final grade derives 50% from the first midterm and 50% from the second midterm. The exam is considered passed only if both tests score at least 18 out of 31.
- General exam: in this case, 80% of the final grade is determined by one general exam, while the remaining 20% depends on the group or individual work grade. If the student decides not to accept the group or individual work grade, 100% of the final evaluation derives from the outcome of the general test.
- There are no penalties for incorrect multiple-choice answers.
- There is no provision for integrations.
- Any grade of at least 18 points is automatically recorded without any exception, as required by the general University regulations.
- According to the University Rules, the student can withdraw from the test once the questions are known.
The exam program is analytically detailed in the Syllabus, containing the relevant chapters and paragraphs for the tests. Any additional material uploaded to Blackboard is also fully subject to examination.
Any indication other than what is explicitly provided in the Syllabus must be considered unfounded to avoid misunderstandings concerning the exam program.
The evaluation for non-attending students will take place through a single test in written form on the entire course program and according to the methods and conditions provided for those attending the general exam, without group or individual work.
In addition to the Course manual, also business cases and exercises available on the Bboard platform are included in the exam material.
- Selected chapters from: VERNIMMEN, DALLOCCHIO, QUIRY et al., Corporate Finance, Wiley, London, Fifth Edition 2017
- S.A. ROSS, R. WESTERFIELD, J. JAFFE, Corporate Finance, McGraw-Hill, 2012, 10° edition.
- A. DAMODARAN, Applied corporate finance, John Wiley & Sons, 2015, 4° edizione.
- M. DALLOCCHIO, A. SALVI, P. QUIRY, et al., Frequently Asked Questions in Corporate Finance, Wiley, 2012.
- Economia & Management.
- Finanza, Marketing e Produzione (EGEA).
- Journal of Applied Corporate Finance (http://www.blackwell-synergy.com).
- Journal of Finance (http://www.afajof.org/jofihome.shtml).
- Journal of Financial Economics (http://www.jfe.rochester.edu).
- Review of Financial Studies (http://rfs.oupjournals.org).
- Financial Management (http://www.fma.org/).
- Journal of Banking & Finance (https://www.journals.elsevier.com/journal-of-banking-and-finance/).