CORPORATE FINANCE

Single discipline educational activity

Course Sheet

Academic Year of enrolment:

2020/2021

Type of Course:

Characterising

Optional/Mandatory:

Compulsory

Degree:

Bachelor's Degree Programme in ECONOMICS AND MANAGEMENT

Location:

SASSARI

Disciplinary Sector:

Financial Management

Language:

Italian

Credits:

Programme Year:

Professor and Collaborators:

CAROSI Andrea

Hours of classroom activity:

Prerequisites:

Accounting (suggested - not binding)

AF code:

40000509

Assessment Methods

Verification of learning:

Written exam. The exam can be taken in 2 mid-term exams or 1 full exam; in all the cases, these are written examination tests.

Each mid-term exam lasts 45 minutes. Mid-term exams consist of 2 parts: a first technical part of 1 practical problem (10/15 points max), and a second theoretical part of 5 quizzes (max 5/15 points, 1/15 point per quiz). The exam grade is the sum of points raised in the two mid-term exams.

The full exam is of 1 hour and 30 minutes. The full exam consists of 2 parts: a first technical part including 2 practical problems (max 20/30 points, about 10/30 points per problem), and a second more theoretical part of 10 quizzes (max 10/30 points, 1/30 points per quiz).

Exams with Distance Learning (DaD)
The structure of the exams (mid-term exams and full exam) remains the same: i.e., mid-term exams: 1 practical problem + 5 quizzes; full exam: 2 practical problems + 10 quizzes.
Exams will be handed out via Moodle with student visualization via Microsoft Teams (i.e., with open cam).
Quizzes will be handed out directly through Moodle, considering 3 minutes for each quiz: therefore, it is a total time of 15 minutes (5 x 3) for mid-term exams, 30 minutes (10 x 3) for full exams; the scrolling of quizzes is sequential (the student is not able to go back and forth), but 5 quizzes per page-screen are provided.
Practical problems will be also handed out through Moodle, considering 30 minutes for each exercise: therefore, it is a total time of 30 minutes (1 x 30) for mid-term exams, 60 minutes (2 x 30) for full exam; as for quizzes, the scrolling of exercises is sequential with 1 exercise per page-screen. The exercises, displayed online, will be solved on paper by students: students have to frame their own work area. Delivery takes place by uploading the photo/pdf of the exercises’ solutions to Moodle before the exam time is up.

Teaching period

Second semester

Objectives

This course provides students with an overview of financial decision making within modern corporations. The course focuses on decisions concerning how firms should raise funds in different forms, and how firms should invest these funds in real assets. The first part of the course deals with investment decisions, that is how to value investment projects, while the second part of the course addresses how to finance these investments and how investment and financing decisions are related. The course is aimed at providing students with a thorough understanding of how financial decisions can create, destroy, or modify shareholder’s value.

By the end of this course, the student should have acquired
(1) Knowledge and understanding: Develop a consistent ability to analyze investment decisions and business financing with the aim of creating value for shareholders.
(2) Applying knowledge and understanding: Use conceptual tools for the understanding and valuation of corporate decisions, as well as for the choice of capital allocation by investors.
(3) Making judgements: Based on modern corporate finance theories, develop the skills to evaluate the economic convenience of decisions by corporations.
(4) Communication skills: Acquire adequate problem-solving skills and analytical exposure of problems and related solutions.
(5) Learning skills: Acquire the skills necessary for the concrete application of the specific knowledge and skills acquired during the course.

Contents

• Introduction to Corporate Finance
• Financial Analysis
• Financial Planning
• How to Calculate Present Values
• Valuing Bonds
• The Value of Common Stocks
• Net Present Value and Other Investment Criteria
• Making Investment Decisions with the Net Present Value Rule
• Introduction to Risk and Return
• Portfolio Theory and the Capital Asset Pricing Model
• Risk and the Cost of Capital
• Project Analysis
• How to Ensure That Projects Truly Have Positive NPVs
• Agency Problems and Investment
• Efficient Markets and Behavioral Finance
• An Overview of Corporate Financing
• How Corporations Issue Securities
• Payout Policy
• Does Debt Policy Matter?
• How Much Should a Corporation Borrow?
• Financing and Valuation

Recommended Bibliography

R. A. Brealey, S. C. Myers, F. Allen, S. Sandri, Principi di Finanza Aziendale, McGraw-Hill Libri Italia, 2020, 8ed, ISBN: 978 88 386 9571 1
E. Bajo,‎ M. Barbi, S. Sandri, Esercizi di Finanza Aziendale, 2017, Maggioli Editore, ISBN: 8891624376

Supplementary teaching materials - such as papers and exercises - will be made available from time to time by the instructor via the Moodle course page

Teaching Methods

Lectures with the use of PowerPoint presentations, blackboard and, in case, the computer. Part of the class sessions are essentially practical and dedicated to solution of financial problems.
Students are strongly invited to participate (actively) in all class sessions.
Slides, traces and the solutions of the exercises, are made available on the course Moodle page which can be accessed by registering at the following, https://edisea.uniss.it/

Contacts/More Information

1. Tutoring service (e.g., office hours) also in English.
2. Teaching materials and bibliographic references also in English.
Coursebook in English is:
Brealey R., Myers S. and F. Allen, Principles of Corporate Finance, 13/e, 2019, Global Edition, ISBN 978 1 260 56555 3.
3. Exams also in English.

CORPORATE FINANCE

Course year: 1

Course year: 2

Course year: 3

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CORPORATE FINANCE