B1817 - SERVICE PROJECT FINANCING

Learning outcomes

At the end of the course students know how to analyze the corporate financial policies, that is, those policies designed to raise funds to invest in corporate activities and, eventually, distribute among the different classes of lenders the cash flows available for the company in terms of: mix of liabilities (equity vs debt); contractual arrangements for funding (minimization of agency costs); term structure of liabilities (time diversification). Specific insights are focused on the dividend policy and the equity management for both listed and not listed companies, with a specific reference to firms operating in the service industry.

Course contents

The goal of the course is to apply fundamental principles of corporate finance to real companies. The perspective is the firm value maximization: the focus is on principles that guide corporate manager decisions on financing and investing. In detail, business decisions are classified into three groups: investment, financing, and dividend decisions. At the end of the course, students will be able to fully understand and apply the process of valuation that represents the standard activity of a security analyst in a broker house.

Topics covered in this course include:

- Analysing balance sheet in a financial perspective;

- Corporate value creation: project valuation and capital budgeting;

- Cost of capital, measuring risk and return;

- Equity financing (Venture Capital, IPO, SEO);

- Determinants of capital structure decision;

- WACC and APV.

Readings/Bibliography

● Brealey, R.A., Myers, S.C., Allen F., Edmans, A., 2023, Principles of Corporate Finance, 14/e, McGraw-Hill.

Teaching methods

Theoretical lectures, applications cases studies and exercises.

Assessment methods

Case studies can be solved into groups (max 3 students per group). Case studies are not mandatory. The final valuation will be the sum of case studies valuation (max 3 points) and written exam valuation (max 30 point). Written exam will be made by one exercise and 5 MCQ to be solved in 75 minutes.

Office hours

See the website of Giulia Baschieri