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Updated A.Y. 2020-2021

LEARNING OUTCOMES: The course analyses corporate finance issues looking to both the investment and the financing policy. Students will be able to understand strategic and practical investment/debt issues and to implement (through excel) standard capital budgeting technique and financial debt planning policy.

KNOWLEDGE AND UNDERSTANDING:  The student will understand the role of the financial function in the firm and the impact of the financial choice on the performance of the firm.

APPLYING KNOWLEDGE AND UNDERSTANDING: Main skills that a student is expected to have at the end of the course are: 1. Use the NPV for evaluating real and financial investments; 2. Consider portfolio construction criteria and the impact on the firm’s risk exposure; 3. Evaluate the impact of capital structure choices on the stakeholders. 4. Measure the impact of market imperfection on the firm’s value

MAKING JUDGEMENTS:  Students will be able to identify key information necessary for a financial evaluation of an investment opportunity and select among different types of financial solutions available.

COMMUNICATION SKILLS: Students will be able to analyse a summarize financial data for an investment opportunity and construct and present reports that summarize the key information necessary for a financial strategy decision.

LEARNING SKILLS: Students are expected to learn how to use excel tools for analysing investment opportunities and selecting less expensive financing solutions

Main topics that will be analysed during the course are:

Corporation and corporate governance

Financial Statement Analysis

Investment decision rules

Fundamentals of Capital Budgeting

Bond Valuation

Valuing Stocks

Portfolio return and risk

Optimal Portfolio Choice and the Capital Asset Pricing Model

Estimating the Cost of Equity and the Cost of Debt

Project’s Cost of Capital

Market efficiency

Capital Structure in a Perfect Market

Debt and Taxes Financial Distress, Management Incentives and Information Asymmetry

Payout Policy and Taxes

Payout Policy vs retention rate

The Adjusted Net Present Value

Capital Budgeting and Valuation with Leverage