95624 - Fundamentals of Corporate Finance

Learning outcomes

The aim of this course is to provide students with a set of analytical tools to understand how corporations structured and managed financial decisions. Companies face two broad financial questions: What investments should the firm make? And how should a firm raise money to finance those investments? At the end of the course, students can: (a) make investment decisions based on the net present value rule; (b) understand how much should the firm borrow; (c) calculate the opportunity cost of capital in a framework of the risk and return market model.

Course contents

1. Introduction to the Course, Financial System and Financial Statement Basics, Financial Ratios
2. Time Value of Money – the mathematics of Finance
3. Present Value calculations and Bond and Stock Pricing
4. The Role of Net Present Value (NPV) to make Investment Decision
   
5. Introduction to Risk and Return, Review of Statistics Concepts
6. CAPM: Capital Asset Pricing Model
7. Capital Budgeting, Project Discount Rate, Free Cash Flow
8. Derivatives and Risk Management
9. Options and Option Pricing
10. Debt Policy and Capital Structure
11. Financing and Valuation methods

Readings/Bibliography

Brealey, Richard, A., and Stewart C. Myers, Sandro Sandri, Principles of Corporate Finance, latest edition, Irwin McGraw-Hill.

Teaching methods

Lectures in presence, with the help of slides, papers taken from the literature

Assessment methods

The assessment methods are different for those students who attend lectures and for those who do not. 

Students Attending Lectures 

Students participating in lectures are requested to perform a take home exam where they will be asked to perform a company evaluation exercise. This will be complemented by the analysis of a case study taken from most important teaching case disseminating in the literature. In this case students will be requested to analyze the case and discuss carefully all the implications, together with the tasks described in the case. 

The final grade will be 90 per cent based on the take home exam (including the case examination) and 10 per cent of class participation. 

Students NOT Attending Lectures

There will be an in class exam on the topics covered in the course

Teaching tools

Slides, papers, books, teaching cases.

Office hours

See the website of Massimiliano Marzo