Relying on the essential knowledge acquired during your "Essential of Corporate Finance" course (Finanza aziendale/Intermediari Finanziari e Finanza Mod. 2), this course is approaching the discipline from an applied perspective. After revising the courses above mentioned, students will be asked to use the concepts in applied assessments of investment decisions, capital structure optimization and dividend policy.
Applied Corporate Finance: A User's Manual (Third Edition) by Aswath Damodaran, Wiley
Chapters to be studied: 1, 3, 4, 5, 6, 8, 9, 10, 11
- understanding and applying the tools for the investment and financing decisions.
- Understanding the firm's dividend policy.
After completing this course, the student will be able of:
- Choosing the investment according the value maximization criteria;
- Determining the "optimal" capital structure": mix of debt and equity for each business;
- Determining the dividend yield to be returned to the shareholders and the buyback policy;
Elements of Corporate Finance
Lectures (60% of the course hours), discussion of quantative problem (30% of the course hours), Seminars with guest speakers (10% of the course hours)
Rules of Engagement
- Rules on individual work
- All exams and assignment are strictly individual work.
- If you miss the final due to health problem, you will be evaluated based on a oral exam.
Class attendance is essential to your success in this course. In class interaction and examples enrich the hands-out and the book materials and it allows you to have a better understanding of the discipline. Attendance will be determined by the signature on the periodically circulated attendance roster.
Type of Assessment
The course grading is based on individual assignments (20% of the final grade) all along the semester and a final exam (80% of the finale grade). The final is a two hours written exam. The date of the final exam will be announced during the course. The final exam is intended to verify: 1) the knowledges of concepts, models and practical tools analyzed during the course; 2) the skills acquired by the student in term of: ability to apply the acquired knowledges, ability to identify proper conclusions, ability to communicate and to use a proper language, ability of understanding and learning.
The problem sets are intended to help the student to develop a better understanding of the topics and to prepare the final exam. The problem set will be handed in class and are due one week after they are distributed. Problem set are individual assignment. Furthermore, during the course the students are asked to group in bunch of 5 in order to solve a short case study on investment analysis. One assignment randomly selected among the one distributed will be graded.
All problem sets and case study must be submitted to access the final exam.
The weights I will be using to come out with your final grade are the following:
Take-home assignment 20%
Final exam 80%
In case you cannot attend the classes the exam will be oral (3 questions) with a preliminary problem set to be solved in a written form
Required material for preparation:
TEXTBOOK: Damodaran, Applied Corporate Finance: a user's manual - 3rd edition, Wiley (REQUIRED)
Slides set (handout to be downloaded from schoology.com – Class attendants only)
- Principles of corporate finance and corporate governance Chapter 1 and 2
Slides set: F01
- The Investment Principle: Risk and Return Models Chapter 3
Slides set: F02
- From Risk & Return Models to Hurdle Rates: Estimation Challenges Chap. 4 Slides set: F02
Measuring Investment Returns:
- The mechanics of investment analysis Chapter 5 (from p. 182 to p. 239) and 6 (from p. 260 to 293)
Slides set: F03
- Capital Structure: The Choices and the Trade off Chapter 7
Slides set: F04
- Capital Structure: Finding the right financing mix Chapter 8
Slides set: F04
- Capital structure: the financing details Chapter 9
Slides Set: F05
- Dividend policy Chapter 10
Slides Set: F06
- External Seminars
Slides set: FXX
Review of (US) accounting -
Slides set: Appendix 01
OTHER STUDENTS ( NON ATTENDING)
TEXTBOOK: Damodaran, Applied Corporate Finance: a user's manual - 3rd edition, Wiley (REQUIRED) CHAPTERS 1 TO 10.
No slides are required.