04521 - Corporate Finance

Learning outcomes

At the end of the course, the student acquires the subjects related to investment and financing decisions of companies. Decisions are developed from the perspective of shareholder value creation. The maximisation of shareholder value is assumed to be the fundamental objective of management; the main reference is to companies listed on official markets, which tend to be large. The fundamental objective of the course is to lead students to answer two fundamental questions in the context of managing a company: - What investments should a company make? - How should it raise the money to finance these investments? All this is preceded by the acquisition of the necessary basic skills relating to the calculation of interest on loans, the discounting of cash flows generated by investment projects, and the construction of a repayment plan for bonds.

Course contents

Module 1

- Main financial regimes

- Present value and cash flows

- Valuation of annuities

- Valuation of bonds and shares

Module 2

- The financial function in business

- Criteria for choosing investments

- Investment decisions

- Management of corporate working capital

- Risk-return relationship

- The Capital Asset Pricing Model

- Risk and cost of capital

- Forms of financing

- Choices of financial structure

- How much debt a company should take on

- Overview of business valuation

- Dividend policy

Readings/Bibliography

R. A. Brealey, S. C. Myers, F. Allen, A. Edmans, S. Sandri, Principles of Corporate Finance, McGraw Hill Italia, ninth edition, 2024

Additional readings may be assigned during the course in order to explore topics of particular relevance.

Teaching methods

Lectures and exercises

Assessment methods

There are two methods for assessing learning: Option A) two written tests to be taken during and at the end of the course (so-called ‘partials’), which will have the same structure. The final assessment will be the average of the marks obtained in the two tests, which will have the same weighting. Option B) written test on the entire course programme to be taken on one of the official dates. Please note: in this case, in order to pass the examination, you must obtain at least 18 in both the part relating to the first module and the part relating to the second module. Please note: in order to pass the exam overall, it is necessary to obtain at least 18 in both modules (Tassinari and Baldi) in the same roll. In this case, the final mark is a weighted average of the marks for the two modules, with weights of 25% and 75% for the first and second modules respectively.

The tests are closed-book.

It will be possible to renounce the grade and retake the examination in the official appeals established according to the school's rules. The examination will be distance or face-to-face on the basis of the rules to be established at school and university level.

The grade will be graded as follows

- <18: insufficient

- 18-23: sufficient

- 24-27: good

- 28-30: excellent

- 30 and 30L: excellent

IT IS NOT POSSIBLE TO TAKE ANY TEST WITHOUT REGISTRATION IN AlmaEsami (no exceptions allowed for any reason).

Teaching tools

Slides and exercises.

Office hours

See the website of Francesco Baldi

See the website of Gian Luca Tassinari